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Sample Business ContractsHome: Sample Business Contracts:
BERNARD CHAUS, INC.
530 Seventh Avenue
18th Floor
New York, NY 10018
October 18, 2004
Mr. David Panitz
c/o Bernard Chaus, Inc.
530 Seventh Avenue
18th floor
New York, New York 10018
Dear Mr. Panitz:
We are pleased to offer you employment with Bernard Chaus,
Inc. (the "Company"), effective as of October 18, 2004 (the "Commencement Date),
on the terms set forth below:
POSITION: Chief Operating Officer reporting to the chief executive
officer of the Company. You shall devote all of your
business time and attention to the business and affairs of
the Company consistent with your position with the Company.
SALARY: $375,000 per year, payable in intervals consistent with the
Company's payroll practices. Increases in salary shall be
considered by the Compensation Committee of the Board of
Directors (the "Compensation Committee") from time to time,
in its sole discretion.
TERM: Three years from the Commencement Date, unless employment
is terminated for any reason prior to such date.
ANNUAL BONUS: You shall be entitled to participate in the Company's
incentive plan for senior management. You shall receive a
guaranteed bonus of $75,000 for the fiscal year ending June
30, 2005 (the "Guaranteed Bonus"). The Guaranteed Bonus
shall be paid on September 30, 2005, unless you are
terminated for Cause or your employment terminated by
reason of your voluntary termination or your death or
Disability (as defined below) prior to such date.
Commencing with the fiscal year ending June 30, 2006, a
target (the "Target") shall be set by the Compensation
Committee of the Company's Board of Directors (the
"Compensation Committee"), in its sole discretion, which,
if achieved, would entitle you to a bonus (the "Target
Bonus") as follows:
20% of Salary if Target is achieved
15% of Salary if at least a percentage of Target
specified by the Compensation Committee, in its sole
discretion, is achieved.
Up to 50% of Salary is the Target is exceeded by
a percentage to be specified by the Compensation Committee,
in its sole discretion.
The Target Bonus for a particular fiscal year shall be
payable to you on September 30 following such fiscal year
ended June 30, but only if you are employed by the Company
on June 30 of such fiscal year; provided, however, that if
your employment shall be terminated by the Company without
Cause (as defined below) other than as a result of your
death or disability, prior to the end of a fiscal year, the
pro rated portion of the Target Bonus for such year (based
<PAGE>
Mr. David Panitz
10/18/04
Page 2
upon the number of months of the fiscal year which elapsed
before the termination date) shall be paid to you on
September 30 following such fiscal year.
AUTOMOBILE
ALLOWANCE: $1,000 per month, plus reimbursement of parking expenses.
OPTIONS: Immediately following the approval by the shareholders of
the Company at the Annual Meeting scheduled for November
10, 2004 (the "Initial Option Date"), of an increase in the
number of shares authorized for grant under the Company's
1998 Stock Option, as amended (the "Plan"), the Company
shall grant to you options to purchase 300,000 shares of
the Company's Common Stock (the "2004 Options"), pursuant
to the terms hereof, provided, that you are employed with
the Company on the Initial Option Date. In addition, the
Compensation Committee will establish a program under which
you can be granted additional options over the three year
Term to purchase up to an additional 300,000 shares of the
Company's Common Stock, if you meet specified targets as
determined by the Compensation Committee, in its sole
discretion ("Target Options"). The exercise price of the
2004 Options, if any, shall be the closing price of the
Company's Common Stock on the Initial Option Date, as
quoted on the Over the Counter Bulletin Board. The exercise
price of the Target Options, if any, shall be the closing
price of the Company's Common Stock on the date of grant of
each Target Option , as quoted on the Over the Counter
Bulletin Board. The 2004 Options shall vest in three equal
annual installments on the anniversary dates of the Option
Date and shall otherwise be subject to the terms of the
Plan. Vesting and other terms of the Target Options shall
be as determined by the Compensation Committee, in its sole
discretion. The 2004 Options and the Target Options, are
collectively referred to herein as the Options. In the
event of a Change of Control (as defined below), during the
Term, any unvested Options then held by you shall vest
immediately. In the event your employment is terminated by
the Company without Cause, other than due to your death or
disability, you shall have thirty (30) days from the
termination date to exercise vested Options. In the event
of termination for any other reason, all unvested Options
shall be forfeited and you shall have thirty (30) days from
the termination date to exercise vested Options, except
that if the termination is the result of your death or
Disability, you shall have ninety (90) days from the
termination date to exercise all of your vested Options.
TERMINATION
BENEFITS: In the event your employment is terminated by the Company
without Cause, prior to the end of the Term, whether
following a Change in Control or otherwise, but other than
as a result of your death or Disability, you shall be
entitled to receive non-competition payments equal to one
year base salary. In addition, if the termination occurs
prior to the payment of the Guaranteed Bonus, or Target
Bonus for the applicable fiscal year, as the case may, you
shall also be paid the Guaranteed Bonus or Target Bonus, as
the case may be, on the dates and to the extent set forth
above under the caption "Annual Bonus" above. In addition,
the Company shall make the COBRA payments on your behalf
necessary to continue your medical coverage for a period
not to exceed twelve months following the date of such
termination without Cause. Your non-competition payments
shall be payable in twelve monthly installments, and
together with your Guaranteed Bonus or Target Bonus, if
any, and entitlement to COBRA payments, shall constitute
full satisfaction of your rights against the Company for
termination of your employment. Your non-competition
payments and COBRA payments described in this paragraph
shall terminate immediately upon your acceptance of a
position as employee (including self-employment) or
consultant with another entity, and you agree to provide
immediate notice to the Company of your acceptance of any
such position. In the event your employment is terminated
by the Company for Cause or as a result of your voluntary
<PAGE>
Mr. David Panitz
10/18/04
Page 3
resignation from the Company or your death or disability,
you shall be paid only your accrued salary and benefits
through the date of termination, and you shall have no
further rights under this Agreement.
CAUSE: Conviction of or plea of guilty or nolo contendere to a
felony; negligence or willful misconduct in performing your
duties; failure to comply with this Agreement in any
material respect; failure to comply with any material
written policy of the Company; failure to carry out lawful
and defined responsibilities assigned by management or the
Board of Directors, or commission of fraud, theft against
or embezzlement from the Company.
CHANGE OF CONTROL: The Company shall be merged or consolidated with an
unaffiliated entity resulting in a change in a majority of
the Board of Directors or the Company shall have sold
substantially all of its assets to an unaffiliated entity;
the acquisition by any person or group of beneficial
ownership (as such terms are defined under Regulation 13D
of the rules and regulations adopted under the Securities
Exchange Act of 1934, as amended) of more than 50% of the
Company's then outstanding common stock resulting in a
change in a majority of the Board of Directors.
DISABILITY: Your inability to report to work and to perform your
regular job functions for a period of ninety consecutive
days or one hundred twenty days in any twelve month period
of the Term due to a physical or mental condition.
NON-COMPETITION: You agree not to compete with the business of the Company,
directly or indirectly, whether as principal, manager,
agent, employee, consultant, investor, advisor or
representative, during the term of your employment and for
a period thereafter equal to one year from the date of your
termination of employment. The foregoing will not prohibit
a passive investment by you in a public company not
exceeding 2% of any class of equity securities of such
company.
NON-SOLICITATION
PERIOD: You agree that, for one year after the termination of your
employment for any reason, you will not, directly or
indirectly, solicit or hire any persons who were employed
or acting as a consultant to the Company during the one
year period prior to the termination of your employment.
CONFIDENTIALITY: You agree that you will, during and after the end of the
term of your employment, keep confidential all non-public
information concerning the Company or its business, except
for purposes consistent with the business of the Company or
for the benefit of the Company, and you will not, directly
or indirectly, use for your own account any of such
information. If you are compelled by operation of law or by
court order or subpoena to disclose any confidential
information concerning the Company or its business, you
will provide the Company with notice as soon as practicable
after you become aware of such requirement and cooperate
with the Company at its expense in seeking a protective
order to preserve the confidentiality of the information to
the greatest extent practicable.
REMEDIES: As you can understand, since we have to be protected, the
Company will be entitled, in addition to other remedies, to
obtain an injunction against any potential or actual
violations of your non-competition, non-solicitation or
confidentiality agreements. You agree to waive the posting
of any bond, which may otherwise be required for the
Company to obtain such injunction.
WITHHOLDING TAXES: All compensation hereunder, shall be subject to applicable
withholding taxes.
<PAGE>
Mr. David Panitz
10/18/04
Page 4
GOVERNING LAW: New York
REPRESENTATION: You represent that your execution of this letter and your
performance of your obligations hereunder will not violate
the terms of any agreement, arrangement, or understanding,
order or decree to which you are a party or by which you
are bound.
Please indicate your acceptance of the terms of this offer
letter by your signature below. Once signed by both parties, this offer letter
shall be binding on both parties.
Sincerely,
Bernard Chaus, Inc.
By: /s/Josephine Chaus
Accepted and Agreed to
as of the date set forth above:
/s/David Panitz
---------------
David Panitz
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