Employment Agreement - Bernard Chaus Inc. and Wayne Miller
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of June 3, 1994, by and between BERNARD
CHAUS, INC., a New York corporation (the "Company"), and WAYNE MILLER (the
"Employee").
W I T N E S S E T H
WHEREAS, the Company desires to employ the Employee and to enter
into an agreement (the "Agreement") embodying the terms of such
employment; and
WHEREAS, the Employee desires to accept such employment with the
Company and to enter into the Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the Company and
the Employee hereby agree as follows:
1. Employment.
The Company hereby agrees to employ the Employee, and the
Employee hereby agrees to accept employment with the Company, for the Term
(as defined in Section 2 below), in the position, and with the duties and
responsibilities set forth in Section 3 below, and upon the other terms
and conditions hereinafter stated.
2. Term.
The initial term of the Agreement shall commence on
July 5, 1994 and shall continue through July 5, 1996 (the "Initial
Term"); provided, however, that the Agreement at all times shall be
subject to earlier termination in accordance with the provisions hereof.
Thereafter, the term of this Agreement shall automatically be extended for
additional one year terms (the "Extended Term") unless either party hereto
shall have provided written notice to the other party hereto of its intent
not to extend this Agreement not less than thirty days prior to the end of
the Initial Term or the Extended Term, as the case may be. For purposes
of this Agreement, the "Term" of this Agreement means the Initial Term
and, if extended, the Extended Term.
3. Position, Duties, Responsibilities.
3.1 Appointment as Executive Vice President -- Finance and
Administration and Chief Financial Officer.
(a) During the Term, the Employee shall serve, and the
Company shall employ Employee, as Executive Vice President -- Finance and
Administration and Chief Financial Officer of the Company, and shall be
responsible for the duties attendant to such office, and such other duties
and responsibilities with the Company, subsidiaries or divisions,
consistent with such positions, as may be assigned by the Chief Executive
Officer of the Company (the "Chief Executive Officer"). The Employee
shall report directly to the Chief Executive Officer.
(b) During the Term, the Employee shall devote his full
working time, attention and energies, to the best of his ability,
experience and talent, to the business and affairs of the Company, and
shall use his best efforts to promote the best interests of the Company.
Without limiting the generality of the foregoing, the Employee shall
perform such duties and responsibilities as may be assigned to him by the
Chief Executive Officer consistent with Employee's positions as Executive
Vice President -- Finance and Administration and Chief Financial Officer
of the Company. Nothing in the Agreement shall preclude the Employee from
engaging in charitable and community affairs, or giving attention to his
passive personal investments; provided, such activities, in the reasonable
judgment of the Chief Executive Officer, do not interfere with the regular
performance of his duties and responsibilities under the Agreement;
provided, further, without the prior approval of the Chief Executive
Officer of the Company, which approval shall not unreasonably be withheld
(i) no such investment (other than an investment in real estate) may
exceed two percent (2%) of any class or series of equity securities of any
entity and (ii) the Employee may not serve as a member of the board of
directors or as a trustee of any other company, association or entity.
3.2 Representation.
In order to induce the Company to enter into the Agreement
on the terms and conditions set forth herein, the Employee hereby
represents and warrants to the Company that his execution of the Agreement
and the performance of his duties and responsibilities hereunder will not
violate or result in a breach of, or in any manner be prohibited or
restricted by, the terms of any agreement, arrangement, understanding
(written or otherwise), order or decree to which he is a party or by which
he is bound.
4. Compensation.
4.1 Salary.
The Company hereby agrees to pay to the Employee, and the
Employee hereby agrees to accept, as cash compensation for all services
rendered during the term of the Agreement, a base salary (the "Base
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Salary") at the rate of $250,000 per annum, payable in equal monthly
installments.
4.2 Initial Bonus.
If Employee is employed by the Company on the date which is
three months from the date of this Agreement, the Company hereby agrees to
pay to Employee an initial bonus equal to $25,000 on such date.
4.3 Annual Cash Bonus.
In addition to the Base Salary provided in clause 4.1 above
and the initial bonus provided in clause 4.2 above, the Employee shall
participate in any bonus plans in which the senior management of the
Company participate.
4.4 Stock Options.
On the date of commencement of employment pursuant to this
Agreement, Employee shall be awarded stock options ("Stock Options") under
the Company's 1986 Stock Option Plan, as amended (the "Stock Option
Plan"), to purchase 50,000 shares of Common Stock (subject to the vesting
provisions and otherwise in accordance with the terms of the Stock Option
Plan, but subject to accelerated vesting as provided in clause 9.2(b)
below). The per share exercise of each such Stock Option shall be equal
to the closing price of the Company's Common Stock on the date of the
award thereof.
5. Employee Benefits.
5.1 Employee Benefit Programs and Plans.
During the Term, the Employee will be entitled to
participate in all benefit programs and plans now or hereafter made
available by the Company to its senior executive officers, including, but
not limited to, pension and other retirement plans, hospitalization,
surgical, dental and major medical coverage and short and long term
disability; provided, however, life insurance coverage (other than any
group coverage) shall be provided separately pursuant to clause 5.2 below.
5.2 Life Insurance.
During the Term, the Company will reimburse the Employee
for the cost of any long-term disability and term life insurance policies
covering the Employee maintained by the Employee; provided, that such cost
shall not be in excess of $8,000 per year. The Employee represents that
he is in good physical and mental health, has never been rated an
insurance risk on account of any past physical or mental history or
condition and does not suffer from any physical or mental condition which
could cause him not to be insurable for life insurance in the amount
provided above at normal premium rates (consistent with general industry
practice in New York). All benefits of such term life insurance policy
shall inure to the Employee's designated beneficiaries.
5.3 Vacations.
The Employee shall be entitled to four (4) weeks paid
vacation in each year, such vacation to be taken at such time or times as
are consistent with the requirements of the Company's business and the
performance of the Employee's duties and responsibilities hereunder.
Unused vacation time may not be accumulated and carried forward to a
subsequent year.
6. Expense Reimbursement and perquisites.
6.1 Out-of-Pocket Expenses.
During the Term, the Company shall reimburse the Employee
for all reasonable, out-of-pocket, expenses incurred by him (in accordance
with the policies and procedures established by the Company for its senior
executive officers) in carrying out his duties and responsibilities
hereunder; provided, the Employee presents appropriately itemized accounts
of, and receipts for, such expenditures.
6.2 Automobile.
During the Term, the Company shall reimburse the Employee
for the cost of leasing an automobile selected by Employee and purchasing
insurance for the automobile and for the reasonable cost of a garage for,
and maintenance on, the automobile; provided, the Company shall not be
required to reimburse the Employee in excess of $600 per month to lease
such automobile and for the related expenses enumerated above.
7. Death or Disability of Employee.
7.1 Death.
In the event of the death of the Employee during the Term,
the Agreement automatically shall be terminated. Base Salary shall be
paid to the Employee's designated beneficiary, or, in the absence of such
designation, to the estate or other legal representative of the Employee
for the month in which death occurs. The Employee shall be entitled to
other death benefits in accordance with the terms of the Company's benefit
programs and plans.
7.2 Disability.
In the event of the Disability (as herein defined) of the
Employee during the Term, the Agreement automatically shall be terminated.
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Base Salary shall be paid to the Employee for the month in which
Disability occurs and for a period of six (6) months thereafter (less any
Disability compensation which the Employee receives in accordance with the
Company's benefit programs and plans). The Employee shall be entitled to
other Disability compensation in accordance with the Company's benefit
programs and plan. "Disability," for purposes of the Agreement, shall
mean the Employee has failed as a result of his illness, physical or
mental disability or other incapacity, for a period of 90 consecutive days
or 180 days during any one year period of the Term to render the services
provided in the Agreement, or has been adjudicated an incompetent.
8. Termination by the Company for Due Cause.
Nothing herein shall prevent the Company from terminating
the Employee's employment for Due Cause (as defined below). Upon such
termination, the Employee shall continue to receive salary only for the
period ending with the date of such termination and the obligation of the
Company to make any further payments, or to provide any benefits specified
herein, to the Employee shall thereupon cease and terminate. The term
"Due Cause", as used herein, shall mean (a) the Employee's willful
misconduct or gross negligence in the performance of his duties on behalf
of the Company, or the Employee's dishonesty in the performance of his
duties on behalf of the Company, (b) the neglect, failure or refusal of
the Employee (continuing for at least 30 days) to carry out any reasonable
request of the Board of Directors or the Chief Executive Officer for the
provision of services hereunder consistent with his duties and
responsibilities hereunder, (c) the material breach of any provision of
the Agreement by the Employee (including, without limitation, the breach
of his representation in clause 3.2 above) provided that in the case of
the breach of the Employee's obligations under clause 3.1(a) and 3.1(b),
said breach shall be continuing for at least 30 days (other than the
obligation to devote full working time, as to which the breach need not be
continuing) or (d) the entering of a plea of guilty or nolo contendere to,
or the Employee's conviction of, a felony or other crime involving moral
turpitude, dishonesty, theft or unethical business conduct. Termination
of employment pursuant to this Section 8 shall be made by delivery to the
Employee of a copy of a letter from the Chief Executive Officer setting
forth the particulars of the conduct which provides the basis for a
termination of the Employee for Due Cause.
9. Termination Other than for Due Cause.
9.1 Termination.
The Agreement may be terminated (a) by the Company (in
addition to termination pursuant to Section 7 or 8) at any time and for
any reason, (b) by the Employee at any time and for any reason or (c) upon
the expiration of the Term.
9.2 Severance and Non-Competition Payments.
(a) If the Agreement is terminated by the Company
(including a termination by not extending the Term) other than as a result
of death or Disability of the Employee or for Due Cause (and other than in
connection with a change in control (as herein defined) of the Company),
the Company shall pay the Employee a severance and non-competition payment
as follows: (i) if such termination is during the Initial Term, the
Company shall pay the Employee a severance and non-competition payment
equal to the Base Salary in effect at the time of termination for the
period equal to the greater of (x) twelve months and (y) the remainder of
the Initial Term and (ii) if such termination is during the Extended Term,
the Company shall pay the Employee a severance and non-competition payment
equal to the Base Salary in effect at the time of termination for the
period equal to twelve months. Such severance and non-competition payment
shall be payable in twelve equal monthly installments (except in the case
of payments made pursuant to clause (i)(y) above, which shall be payable
in monthly installments for the remainder of the Initial Term) commencing
on the first day of the month following termination.
(b) If the Agreement is terminated by the Company or by
the Employee For Good Reason (as herein defined) in connection with or
following a change in control of the Company, other than as a result of
death or Disability of the Employee or for Due Cause, the Company shall
pay the Employee a severance and non-competition payment equal to the sum
of (x) two times the Base Salary in effect at the time of termination plus
(y) an amount equal to two times the annual cash bonus award earned by the
Employee pursuant to clause 4.3 above in respect of the year immediately
preceding the year of termination. Such severance and non-competition
payment shall be paid in a lump sum on the first day of the month
following termination. In addition, all Stock Options which have not yet
vested shall be deemed to have vested on the date of such termination.
"Good Reason" for purposes of this Section 9(b) only shall mean (i) the
Company shall have materially breached the provisions of the Agreement
which breach shall continue for at least 30 days (except that the
termination of the Employee's employment by the Company for Due Cause or
as a result of the Disability of the Employee shall not be deemed a breach
of the Agreement) or (ii) the assignment to the Employee by the Board of
Directors and/or Chief Executive Officer of duties materially inconsistent
with the Employee's position (including status, corporate office(s),
title(s) or reporting responsibility), authority, duties or
responsibilities as contemplated by Section 3 of the Agreement, or any
action by the Board or Chief Executive Officer which results in a material
diminution of the position, authority, duties or responsibilities of the
Employee as contemplated by Section 3 of the Agreement. A "change in
control" of the Company shall be deemed to have occurred if (x) the
Company shall have merged or consolidated with an unaffiliated entity or
the Company shall have transferred or sold all or substantially all of its
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assets to an unaffiliated entity, (y) the majority of the directors on the
Board at any time have not been nominated for election by the directors on
the Board immediately prior to any such election of directors, or (z) any
person or group shall have acquired a majority of the voting securities of
the Company.
(c) After the termination of the Agreement, any severance
and non-competition payments due to Employee from the Company hereunder
shall be reduced by an amount equal to 50% of all amounts received by the
Employee in connection with any other employment (including self-
employment); provided, however, that any such severance and non-
competition payments due to Employee from the Company hereunder shall be
reduced by an amount equal to 100% of all amounts received by the Employee
in connection with any other employment if the Company agrees, at its
option, to waive Employee's non-competition obligations pursuant to
Section 11(a) herein; provided, further, however, that as liquidated
damages and the sole remedy for the breach by Employee of his non-
competition obligations under Section 11(a), if not so waived by the
Company, any such severance and non-competition payments shall be
immediately terminated and Employee shall return to the Company any such
payments made for periods after the date of commencement of employment
with a competitor in breach of such obligations.
10. Confidential Information.
(a) The Employee agrees not to use, disclose or make
accessible to any other person, firm, partnership, corporation or any
other entity any Confidential Information (as herein defined) pertaining
to the business of the Company except (i) while employed by the Company,
in the business of and for the benefit of the Company or (ii) when
required to do so by a court of competent jurisdiction, by any
governmental agency having supervisory authority over the business of the
Company, or by any administrative body or legislative body (including a
committee thereof) with jurisdiction to order the Company to divulge,
disclose or make accessible such information. For purposes of the
Agreement, "Confidential Information" shall mean non-public information
concerning the Company's financial data, statistical data, strategic
business plans, product development (or other proprietary product data),
customer and supplier lists, customer and supplier information,
information relating to governmental relations, discoveries, practices,
processes, methods, trade secrets, marketing plans and other non-public,
proprietary and confidential information of the Company, that, in any
case, is not otherwise generally available to the public and has not been
disclosed by the Company to others not subject to confidentiality
agreements. In the event the Employee's employment is terminated
hereunder for any reason, he immediately shall return to the Company all
Confidential Information in his possession.
(b) The Employee and the Company agree that this covenant
regarding confidential information is a reasonable covenant under the
circumstances, and further agree that if, in the opinion of any court of
competent jurisdiction, such covenant is not reasonable in any respect,
such court shall have the right, power and authority to excise or modify
such provision or provisions of this covenant as to the court shall appear
not reasonable and to enforce the remainder of the covenant as so amended.
The Employee agrees that any breach of the covenant contained in this
Section 10 would irreparably injure the Company. Accordingly, the
Employee agrees that the Company, in addition to pursuing any other
remedies it may have in law or in equity, may obtain an injunction against
the Employee from any court having jurisdiction over the matter,
restraining any further violation of this Section 10.
(c) The provisions of this Section 10 shall survive the
termination of the Agreement.
11. Non-Competition; Non-Solicitation.
(a) The Employee agrees that, except for a termination
following a change in control, during the Term and for a period of one
year thereafter (herein referred to as the "Non-Competition Period"),
without the prior written consent of the Company: (i) he shall not,
directly or indirectly, either as principal, manager, agent, consultant,
officer, director, greater than two percent (2%) holder of any class or
series of equity securities, partner, investor, lender or employee or in
any other capacity, carry on, be engaged in or have any financial interest
in or otherwise be connected with, any entity which is now or at the time,
engaged in any business activity competitive (directly or indirectly) with
the business of the Company; and (ii) he shall not, on behalf of any such
competing entity, directly or indirectly, have any dealings or contact
with any suppliers or customers of the Company. For purposes of this
Section 11, the business of the Company shall mean the manufacture and
sale of women's apparel at price points comparable to those of the
Company. All severance and non-competition payments pursuant to Section 9
shall be in consideration of the Employee's agreement not to compete with
the Company; it being understood, however, that the Employee will have no
obligations under this Section 11(a) if following the termination of his
employment for any reason (including termination by the Employee) the
Employee is not receiving or is not entitled to severance and non-
competition payments under Section 9.
(b) During the Term and during the Non-Competition Period,
the Employee agrees that, without the prior written consent of the Company
(and other than on behalf of the Company), the Employee shall not, on his
own behalf or on behalf of any person or entity, directly or indirectly
hire or solicit the employment of any employee who has been employed by
the Company at any time during the one (1) year immediately preceding such
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date of hiring or solicitation and was also an employee of the Company at
the time the Employee was employed by the Company.
(c) The Employee and the Company agree that the covenants
of non-competition and non-solicitation are reasonable covenants under the
circumstances, and further agree that if, in the opinion of any court of
competent jurisdiction such covenants are not reasonable in any respect,
such court shall have the right, power and authority to excise or modify
such provision or provisions of these covenants as to the court shall
appear not reasonable and to enforce the remainder of these covenants as
so amended. The Employee agrees that any breach of the covenants
contained in Section 11(b) would irreparably injure the Company.
Accordingly, the Employee agrees that the Company, in addition to pursuing
any other remedies it may have in law or in equity, may obtain an
injunction against the Employee from any court having jurisdiction over
the matter, restraining any further violation of Section 11(b).
(d) The provisions of this Section 11 shall survive the
termination of the Agreement.
12. Notices.
All notices, request, demands or other communications
required or permitted under the Agreement shall be in writing and shall be
deemed duly to have been given when mailed by registered or certified
mail, return receipt requested, postage prepaid, sent by facsimile or
personally delivered by hand or overnight courier to the address stated
below or to such changed address as the addressee may have given by
similar notice.
To the Company: Bernard Chaus, Inc.
1410 Broadway
New York, New York 10018
Attention: Chairman
With a copy to: Shereff, Friedman, Hoffman & Goodman
919 Third Avenue
New York, New York 10022
Attention: Martin Nussbaum, Esq.
To the Employee: Mr. Wayne Miller
1365 York Avenue, Apt. 26B
New York, New York 10021
With a copy to: Davis & Gilbert
1740 Broadway
New York, New York 10019
Attention: Lewis Rubin, Esq.
Communications delivered by hand or overnight courier or by facsimile
shall be deemed received on the date of delivery and communications sent
by registered or certified mail shall be deemed received three (3)
business days after the sending thereof.
13. Entire Agreement.
The Agreement contains the entire agreement between the
parties hereto with respect to the matters contemplated herein and
supersedes all prior agreements or understandings among the parties
related to such matters.
14. Binding Effect; Assignment.
The Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns and upon the
Employee and his successors and assigns. "Successors and assigns" shall
mean, in the case of the Company, any successor pursuant to a merger,
consolidation, or sale or a transfer of all or substantially all of the
assets of the Company and, in the case of the Employee, his heirs and/or
legal representatives as determined by will or by operation of law.
Neither the Agreement nor any rights hereunder shall be assignable or
otherwise subject to hypothecation by the Employee (except by will or by
operation of law). The Company may assign the Agreement and all of its
rights hereunder to any of its successors and assigns.
15. Amendment or Modification; Non-Waiver.
No provision of the Agreement may be amended or waived
unless agreed to in writing, signed by the parties hereto. The waiver of,
or failure to take action with regard to, any breach of any term or
condition of the Agreement shall not be deemed to constitute a continuing
waiver or a waiver of any other breach of the same or any other term or
condition.
16. Beneficiaries; References.
The Employee shall be entitled to select (and change, to
the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder
following the Employee's death, and may change such election by giving the
Company written notice thereof. In the event of the Employee's death,
Disability or a judicial determination of his incompetence, reference in
the Agreement to the Employee shall be deemed, where appropriate, to refer
to his beneficiary, estate or other legal representative.
17. Survivorship.
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The respective rights and obligations of the parties
hereunder shall survive any termination of the Agreement to the extent
necessary to the intended preservation of such rights and obligations.
The provisions of this Section 17 are in addition to the survivorship
provisions of any other section of the Agreement.
18. Governing Law.
The validity, interpretation, construction, performance and
enforcement of the Agreement shall be governed by the laws of the State of
New York, without reference to rules relating to conflict of law.
19. Severability.
If any provision of the Agreement shall be determined to be
invalid or unenforceable (in whole or in part) for any reason, the
remaining provisions of the Agreement shall be unaffected thereby and
shall remain in full force and effect to the fullest extent permitted by
law. The provisions of this Section 20 are in addition to the
severability provisions of any other section of the Agreement.
20. Withholding.
The Company shall withhold from any payments due to the
Employee hereunder, all taxes, FICA or other amounts required to be
withheld pursuant to any applicable law.
21. Headings.
The headings contained in the Agreement are intended solely
for convenience of reference and shall not affect in any way the meaning
or interpretation of the Agreement.
22. Counterparts.
The Agreement may be executed in one or more counterparts,
each of which for all purposes shall be deemed to be an original, and all
of which when taken together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed the
Agreement as of the day and year first above written.
BERNARD CHAUS, INC.
By: /s/ Josephine Chaus
Name:
Title:
By: /s/ Wayne Miller
Wayne Miller