Employment Agreement - Samsonite Corp. and Richard R. Nicolosi
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), effective as of May 15, 1996
(the "Effective Date"), by and between SAMSONITE CORPORATION, a Delaware
corporation (the "Company"), and RICHARD R. NICOLOSI (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to retain the services of the Executive
and to enter into this Agreement as of the Effective Date.
WHEREAS, the Executive is willing to serve the Company on the terms
and conditions herein provided.
NOW, THEREFORE, in consideration of the foregoing and of the premises
and covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT
The Company agrees to employ the Executive and the Executive agrees to
serve the Company on the terms and conditions set forth herein.
2. TERM
This Agreement shall have a term (the "Term") beginning on the
Effective Date and expiring on the second anniversary of the Effective Date.
3. POSITION AND DUTIES
(a) The Executive shall serve as President and Chief Executive
Officer of the Company and shall perform such duties and exercise such
supervision and powers over and with regard to the business of the Company
customarily associated with his position, as well as such duties and services
prescribed herein and as may be prescribed from time to time by the Board of
Directors of the Company or any duly authorized committee thereof (the "Board").
The Executive shall perform such duties, under the supervision and direction of
the Board, to the best of his ability and in a diligent and proper manner. The
Executive shall report directly to the Board.
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(b) Except during customary vacation periods and periods of illness,
the Executive shall, during his employment hereunder, devote his full business
time and attention to the performance of services for the Company, and as
determined by the Board. Notwithstanding the foregoing sentence, nothing in
this Agreement shall preclude the Executive from (i) serving on the board of
directors of up to two business corporations (other than the Company and its
subsidiaries) and (ii) managing his personal investments, as long as such
activities do not interfere with the Executive's performance of his duties
hereunder.
(c) Nothing in this Agreement shall affect the Executive's duty of
loyalty and duty of care to the Company and its subsidiaries as provided under
applicable state laws.
(d) The Company shall nominate the Executive to serve as a director
of the Company and use its best efforts to cause the Executive to be elected
(and re-elected) to such position during his employment hereunder. The
Executive agrees to resign as a director of the Company upon his termination of
employment with the Company.
4. COMPENSATION AND RELATED MATTERS
(a) SALARY. During the Executive's employment hereunder, the Company
shall pay to the Executive a salary ("Base Salary") in equal installments in
accordance with normal payroll practices of the Company but not less frequently
than monthly. The Base Salary shall be payable at the rate of $600,000 per
annum, starting as of the Effective Date. The payments of Base Salary hereunder
shall not in any way limit or reduce any other obligation of the Company
hereunder, and no other compensation, benefit or payment hereunder shall in any
way limit or reduce the obligation of the Company to pay the Executive's Base
Salary hereunder.
(b) RELOCATION. It is contemplated that the Executive's office shall
be in the Company's executive offices in Denver, Colorado, unless, subsequently
during the Term, the Board and the Executive agree that it would be desirable
for the Executive's office to be located elsewhere. Accordingly, the Executive
shall promptly
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relocate to the Denver metropolitan area and shall own or lease a residence
in the Denver metropolitan area so long as he shall be headquartered there.
To defray the cost of owning or leasing a residence proximate to the Executive's
office, the Company shall pay the Executive an allowance of $150,000 per annum,
payable monthly during the Executive's employment hereunder. In addition, to
defray the cost of relocating to the Denver metropolitan area, the Company
shall make a lump sum payment of $100,000 to the Executive, payable within
45 days after the date hereof, and except for such lump sum payment, the
Company shall have no obligation to reimburse the Executive for any costs and
expenses incurred in connection with the relocation of the Executive and his
family to the Denver metropolitan area.
(c) EXPENSES. (i) The Executive shall be entitled to receive prompt
reimbursement from the Company of all reasonable expenses incurred by the
Executive in performing services hereunder, in accordance with the policies and
procedures established by the Company from time to time. In light of the fact
that the Executive may be required to travel for extended periods of time, such
expenses shall include all reasonable expenses of the Executive's wife for
travel with the Executive in the service of the Company. The Executive shall
furnish the Company with evidence that such expenses were incurred as the
Company may from time to time reasonably request.
(ii) In the event that the Company relocates its executive offices
from Denver, Colorado to a location outside a 30 mile radius from Denver, the
Company shall reimburse the Executive for all reasonable relocation and moving
expenses incurred by him in connection with relocating his residence. The
Executive shall furnish the Company with evidence that such expenses were
incurred as the Company may from time to time reasonably request. The Company
shall reimburse the Executive on a grossed-up basis (taking into account any
deductions available to the Executive in respect of such expenses) in the event
that any incremental taxes are incurred by him solely by reason of such
reimbursement of such relocation and moving expenses.
(d) STOCK OPTION AGREEMENT. As an inducement to the Executive to
enter into this Agreement and solely in connection with the performance of
services by the
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Executive pursuant to this Agreement, the Executive shall receive a grant of
stock options (the "Options") to purchase 425,532 shares of the common stock,
par value $.01 per share ("Common Stock"), of the Company pursuant to and
subject to the terms and conditions of the Stock Option Agreement, dated as
of the date hereof, by and between the Company and the Executive (the "Stock
Option Agreement"). The Stock Option Agreement shall be executed
concurrently with this Agreement.
(e) OTHER BENEFITS. From and after the Effective Date, the Executive
shall be entitled to participate in all of the Company's employee pension plans,
welfare benefit plans, tax-deferred savings plans, or other benefit arrangements
(including any insurance or trust arrangements maintained generally for the
benefit of the Company's directors and officers) and in which the senior
executives of the Company who receive equity-based compensation are entitled to
participate (collectively, the "Company Plans"), on the same basis as other
senior executives of the Company who receive equity-based compensation;
PROVIDED, HOWEVER, that the Company shall waive, or obtain the waiver of, any
waiting period or other eligibility requirements of such plans or other benefit
arrangements to the maximum extent permitted under such plans and arrangements,
but only to the extent that the same does not result in any additional cost or
obligation to the Company (other than costs and obligations arising solely as a
result of the addition of the Executive as a participant therein), so as to
provide such benefits to the Executive (and to commence accruing such benefits,
as the case may be, for the account of the Executive) immediately on and after
the Effective Date. Without limiting the generality of the foregoing, from and
after the Effective Date, the Executive shall be provided with the use of a
Company provided automobile in accordance with the Company's current policy for
executive officers. Without limiting the generality of the foregoing, the
Executive shall be entitled to participate in any supplemental executive
retirement plan or excess benefit plan (a "SERP") that the Company may maintain
from time to time for the benefit of its senior executive officers on the same
terms and conditions as are applicable to other senior executive officers of the
Company who receive equity-based compensation, provided that the amount of
compensation with respect to which benefits are determined under such plan shall
be limited as determined
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by the Board. The Company and the Executive agree that nothing in this
Agreement shall preclude the Company from amending or terminating any such
employee benefit plan, policy or practice, whether now or hereinafter in
effect, so long as such amendment or termination applies substantially
equally to all other senior executive officers of the Company who receive
equity-based compensation.
(f) INCENTIVE BONUS. The Executive shall be eligible to receive an
annual incentive bonus (the "Incentive Bonus") in respect of each fiscal year of
the Company that ends during the Term, starting with the fiscal year ending
January 31, 1997. The Incentive Bonus in respect of each fiscal year that ends
during the Term (each, a "Reference Year") shall be calculated on the terms
hereafter set forth in this Section 4(f). The Incentive Bonus may, subject to
the conditions set forth below, equal up to $500,000 with respect to each
Reference Year. The Executive's Incentive Bonus shall consist of a Target Bonus
and a Project Bonus (each as defined below), determined as follows:
(i) A portion of the Incentive Bonus (the "Target Bonus") in an
amount equal to the EBIT Attainment Percentage (as defined below)
multiplied by $250,000 shall be payable to the Executive with respect to
each Reference Year, provided that the Target Bonus shall not be paid with
respect to any Reference Year if the EBIT Attainment Percentage with
respect to such Reference Year is less than eighty percent (80%). The
"EBIT Attainment Percentage" with respect to any Reference Year shall mean
the percentage that is established as follows: if the EBIT (as defined
below) of the Company with respect to the Reference Year is
(A) less than the Minimum EBIT Target (as defined below) for such
Reference Year, then the EBIT Attainment Percentage shall equal zero
percent (0%);
(B) equal to the Minimum EBIT Target for such Reference Year, the
EBIT Attainment Percentage shall equal eighty percent (80%);
(C) greater than the Minimum EBIT Target but less than the Annual
EBIT Target (as de-
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fined below) for such Reference Year, the EBIT Attainment Percentage
shall equal the sum of (x) eighty percent (80%) plus (y) the product
of twenty percent (20%) multiplied by a fraction, the numerator of
which shall be the excess of (I) the EBIT of the Company over (II)
the Minimum EBIT Target for such Reference Year and the denominator
of which shall be the excess of the Annual EBIT Target over the
Minimum EBIT Target; or
(D) equal to or greater than the Annual EBIT Target for such
Reference Year, the EBIT Attainment Percentage shall equal one hundred
percent (100%).
(ii) The Board, in consultation with the Executive, shall determine
the "Annual EBIT Target" and the "Minimum EBIT Target" for the Reference
Years ending January 31, 1997 and January 31, 1998, on or before June 30,
1996 and March 15, 1997, respectively, and promptly after such targets have
been determined, the Board shall give the Executive written notice thereof.
The Annual EBIT Targets and Minimum EBIT Targets determined by the Board
shall be reasonably achievable in the good faith judgment of the Board.
The Board, in consultation with the Executive, shall have the right, acting
in good faith, to adjust the Annual EBIT Target and the Minimum EBIT Target
upon the occurrence of any acquisition, disposition or other significant
event that occurs after such targets have been determined. For purposes of
this Section 4(f), "EBIT" shall mean, for any period, the Company's
consolidated earnings (excluding extraordinary gains and losses and gains
or losses from the sale of fixed assets outside of the ordinary course of
business) from continuing operations before interest and taxes for such
period, and EBIT shall be determined on the same basis of the Annual EBIT
Target and the Minimum EBIT Target. Notwithstanding the foregoing, EBIT
for any Reference Year shall be equitably adjusted by the Board, in
consultation with the Executive and acting in good faith (solely for the
purposes of Section 4(f)(i)) to the extent that the Company's business was
not conducted in the ordinary course in accordance with past practices.
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(iii) A portion of the Incentive Bonus in a target amount equal to a
maximum of $250,000 (the "Project Bonus") shall be payable to the Executive
to the extent that the Board determines that the Executive has
satisfactorily completed certain projects (the "Annual Projects")
established by the Board with respect to such Reference Year in accordance
with this subparagraph (iii), provided that the Board may award a Project
Bonus of between eighty percent (80%) and one hundred percent (100%) of the
target amount based upon its evaluation of the manner in which the
Executive completes the Annual Projects. The Board, in consultation with
the Executive, shall determine the Annual Projects for the Reference Years
ending January 31, 1997 and January 31, 1998, on or before June 30, 1996
and March 15, 1997, respectively, and promptly after such projects have
been determined, the Board shall give the Executive written notice thereof.
The Annual Projects determined by the Board shall be reasonably achievable
in the good faith judgment of the Board. The Executive acknowledges that
the Annual Projects established by the Board may not be measured by
financial results or other quantifiable standards and may depend on
subjective judgments by the Board, and the Executive agrees that the
determination of the Board as to the extent to which such Annual Projects
have been satisfactorily completed shall be conclusive for all purposes,
provided that such determination shall be made in good faith.
(iv) Each Incentive Bonus (including the Target Bonus and the Project
Bonus) shall be paid not more than 30 days after a determination by the
Board that an applicable performance goals have been met, and such
determination shall be made not later than 10 days following the filing of
a Form 10-K for the Company, or if the Company is not required to file a
Form 10-K, not later than 10 days following the date upon which the
Company's audited financial statements first become available.
(v) The Executive shall be entitled to receive an Incentive Bonus for
the full Reference Year ending January 31, 1997 as if he had been employed
for the entire fiscal year then ending, provided that the Executive shall
be entitled to receive at
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least eighty percent (80%) of the maximum Incentive Bonus for such
Reference Year ($400,000), regardless of whether or not the Minimum EBIT
Target or Annual Projects for such Reference Year shall have been achieved.
The Executive shall not be entitled to an Incentive Bonus with respect to
the fiscal year ending January 31 1999 or any portion thereof.
(g) VACATION AND OTHER ABSENCES. The Executives shall be entitled to
paid vacation and such other paid absences whether for holidays, illness,
personal time or any similar purposes, in accordance with the plans, policies,
programs and practices of the Company in effect from time to time, at least
comparable to those received by other senior executives of the Company;
PROVIDED, HOWEVER, that the Executive shall always be entitled to at least four
weeks of paid vacation in each calendar year and pro rata for part of a year.
(h) SERVICES FURNISHED. The Company shall furnish the Executive with
office space, secretarial assistance and such other facilities and services as
shall be suitable to the Executive's position and adequate for the performance
of his duties hereunder.
5. TERMINATION
The Executive's employment hereunder may be terminated under the
following circumstances:
(a) DEATH. The Executive's employment hereunder shall terminate upon
his death.
(b) DISABILITY. If the Board determines in good faith, based on
medical evidence acceptable to it, that the Executive has become physically or
mentally disabled or incapacitated during his employment hereunder for a
continuous period of ninety (90) days to such an extent that he shall be unable
to perform his duties hereunder then, notwithstanding the provisions of Section
2, the Company may, after the expiration of said ninety (90) day period and
during the continuance of such disability or incapacity, give to the Executive a
Notice of Termination (as defined in Section 5(e) hereof) of the Executive's
employment hereunder and such employment shall terminate on the date provided in
Section 5(f) hereof.
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(c) TERMINATION BY THE COMPANY. The Company may terminate the
Executive's employment hereunder at any time with or without Cause. For
purposes of this Agreement, the Company shall have "Cause" to terminate the
Executive's employment hereunder upon (A) the engaging by the Executive in
willful misconduct that is materially injurious to the Company, (B) the
embezzlement or misappropriation of funds or property of the Company by the
Executive or the conviction of the Executive of a felony or the entrance of a
plea of guilty by the Executive to a felony or (C) the failure or refusal by
the Executive to devote his full business time and attention (as described in
Section 2(b) of this Agreement) to the performance of his duties and
responsibilities hereunder or any other breach by the Executive of this
Agreement in any material respect if such breach has not been cured by the
Executive within thirty (30) days after the Preliminary Notice (as defined
below) has been given to the Executive. For purposes of this paragraph, no
act, or failure to act, on the Executive's part shall be considered "willful"
unless done, or omitted to be done, by him not in good faith and without
reasonable belief that his action or omission was in the best interest of the
Company. The Executive shall not be deemed to have been terminated for
Cause, unless the Company shall have given the Executive (i) notice (the
"Preliminary Notice") setting forth, in reasonable detail the facts and
circumstances claimed to provide a basis for termination for Cause, (ii) a
reasonable opportunity for the Executive, together with his counsel, to be
heard before the Board and (iii) a Notice of Termination stating that, in the
good faith judgement of the Board, the Executive was guilty of conduct set
forth in clauses (A), (B) or (C) above, and specifying the particulars
thereof in reasonable detail. Upon receipt of the Preliminary Notice, the
Executive shall have thirty (30) days in which to appear before the Board
with counsel, or take such other action as he may deem appropriate, and such
thirty (30) day period is hereby agreed to as a reasonable opportunity for
the Executive to be heard.
(d) TERMINATION BY THE EXECUTIVE. The Executive may voluntarily
terminate his employment hereunder at any time with or without Good Reason.
For purposes of this Agreement, "Good Reason" shall mean, so long as the
Executive has not been guilty of the conduct set forth in clauses (A), (B) or
(C) of Section 5(c) hereof, (i) a failure by the Company to comply with any
material provi-
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sion of this Agreement that has not been cured within thirty (30) days after
written notice of such noncompliance has been given by the Executive to the
Company or (ii) the assignment to the Executive by the Company of duties
inconsistent with the Executive's position, duties or responsibilities as
President and Chief Executive Officer of the Company including, but not
limited to, any material reduction in such position, duties or
responsibilities or material change in his title, (iii) a relocation by the
Company of the Executive's office to a location outside a 30 mile radius from
Denver, Colorado, which relocation is made not as part of a relocation of the
Company's executive offices (in the case of each of clauses (ii) and (iii)
above, without the consent of the Executive) or (iv) the occurrence of a
Change of Control (as defined in the Stock Option Agreement). The
Executive's election to terminate under this Section 5(d) shall be made by
giving Notice of Termination not later than 60 days from, as applicable, the
date that the Company fails to cure under (i) above, the assignment of duties
under (ii) above, the date that the Executive is advised of the proposed
relocation under (iii) above and the date of the Change of Control described
under (iv) above.
(e) NOTICE OF TERMINATION. Any termination of the Executive's
employment by the Company or by the Executive (other than termination
pursuant to Section 5(a) hereof) shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice that shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances, if any, claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated.
(f) DATE OF TERMINATION. Except to the extent otherwise herein
provided, "Date of Termination" shall mean (i) if the Executive's employment
is terminated pursuant to Section 5(a), the date of his death, (ii) if the
Executive's employment is terminated pursuant to Section 5(b) or (c), the
date of or a later date specified in the Notice of Termination, (iii) if the
Executive's employment is terminated pursuant to Section 5(d), the date on
which the Notice of Termination is given and (iv) in the case of a failure by
the Company to
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offer to extend this Agreement as described in Section 5(c) hereof, the last
day of the Term. Except as provided in and subject to Section 6 hereof, the
Company shall not have any obligation to Executive for salary continuation,
severance or termination pay upon termination of this Agreement.
6. COMPENSATION UPON TERMINATION
(a) If the Executive's employment is terminated (i) by the Company
for Cause, (ii) by the Executive other than for Good Reason, or (iii) by
reason of the Executive's death or disability (pursuant to Section 5(b)
hereof), then the Company shall pay the Executive his full Base Salary
through the Date of Termination (to the extent not otherwise paid through the
Date of Termination) at the rate in effect immediately prior to the Date of
Termination, provided that if the Executive's employment hereunder terminates
by reason of his death, the Company shall continue to make salary payments at
the rate of the Base Salary then in effect in respect of the month following
the date of death. In addition, notwithstanding any provision to the
contrary in this Agreement, the Executive shall continue to participate in,
and shall receive all accrued benefits to which the Executive is entitled
under, all of the Company Plans, through the Date of Termination, provided
that the Executive shall not be entitled to any portion of the Incentive
Bonus unless such bonus shall be payable pursuant to Section 4(f) with
respect to a Reference Year ending on or before the Date of Termination.
With respect to the Incentive Bonus, if the Date of Termination occurs after
the end of a Reference Year and prior to the determination of whether the
performance goals for such Reference Year were met, such Incentive Bonus
shall be payable, if it is determined that such goals were met, in accordance
with the provisions of Section 4(f) hereof.
(b) If the Executive's employment is terminated (i) by the Company
without Cause (other than for disability pursuant to Section 5(b) hereof), or
(ii) by the Executive for Good Reason, then the Company shall pay to the
Executive, as severance pay, the following amounts, which shall not be
discounted to take into account present value:
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(A) to the extent not otherwise paid through the Date of Termination,
the Executive's full Base Salary through the Date of Termination at the
rate in effect at the time Notice of Termination is given; and
(B) in lieu of any further salary and bonus or other incentive
compensation payments to the Executive for periods subsequent to the Date
of Termination, the sum of $1,000,000.
Such amounts shall be payable in two equal installments on the 5th
day following the Date of Termination and the 180th day following the Date of
Termination, respectively. In addition to the foregoing, until such time
that the Executive becomes eligible for coverage under a program maintained
or sponsored by a subsequent employer of the Executive (not including
self-employment), the Company shall, at the Company's expense, allow the
Executive to continue to participate, for the number of years (including
partial years) then remaining in the Term, to the same extent and upon the
same terms as the Executive participated in such plans immediately prior to
the termination of his employment, in the Company's medical reimbursement and
other welfare benefit plans in which the Executive was entitled to
participate immediately prior to the Date of Termination; provided that the
Executive's continued participation in such plan shall be continued pursuant
to this sentence only to the extent permissible under the general terms and
provisions of such plans and applicable law.
7. RESTRICTED STOCK
(a) ISSUANCE OF COMMON STOCK. As an essential inducement to the
Executive's entering into this Agreement, the Company hereby agrees to issue
to the Executive, without cost to the Executive, 60,000 shares of Common
Stock of the Company (the "Restricted Shares"), on the terms and conditions
set forth herein. The Restricted Shares shall be registered in the
Executive's name, but the certificates evidencing the Restricted Shares shall
be retained by the Company until such shares become vested and the
restrictions thereon lapse in accordance with Section 7(d) hereof. The
period prior to the time that any particular Restricted Shares become vested
and the restrictions thereon lapse is hereinafter referred to
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as the "Restricted Period" with respect to such shares. The Executive shall
execute a stock power, in blank, with respect to such Restricted Shares and
deliver the same to the Company.
(b) RIGHTS AS A SHAREHOLDER. Except as provided in Sections 7(c)
and 7(d) hereof, during the Restricted Period, the Executive shall have all
the rights of a shareholder with respect to Restricted Shares, including the
right to receive dividends or other distributions and the right to vote such
shares; provided that any such dividends or other distributions shall be
retained by the Company unless and until the Restricted Shares in respect of
which such dividends or other distributions were paid shall vest pursuant to
Section 7(d) hereof.
(c) NON-TRANSFERABILITY. During the Restricted Period, the
Executive may not sell, transfer, pledge, or otherwise encumber or dispose of
the Restricted Shares, and any attempted sale, transfer, pledge or other
encumbrance or disposition (whether voluntary or involuntary) in violation of
this Section 7(c) shall be null and void.
(d) VESTING; LAPSE OF RESTRICTIONS; FORFEITURE. Except as
otherwise provided in this Section 7(d), the Restricted Shares shall vest,
and the restrictions imposed thereon shall lapse, as to 50% of such shares on
the first anniversary of the Effective Date, and as to the remaining 50% of
such shares on the second anniversary of the Effective Date; PROVIDED that if
a Change of Control occurs during the Term and the Executive remains
continually employed by the Company from the date hereof to the Change of
Control Date (as defined in the Stock Option Agreement), then all of the
Restricted Shares that have not theretofore vested shall become vested as of
the Change of Control Date. If the Executive's employment with the Company
is terminated prior to the second anniversary of the Effective Date, the
Executive's rights with respect to the Restricted Shares shall be as follows:
(i) If the Executive's employment with the Company is terminated (A)
by the Company without Cause, other than for disability, or (B)
by the Executive for Good Reason,
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then, as of the Date of Termination, (X) fifty percent (50%)
of the Restricted Shares shall become vested, if the Date of
Termination is on or before the first anniversary of the
Effective Date, or (Y) all of the Restricted Shares that have
not vested as of the Date of Termination shall become vested,
if the Date of Termination is after the first anniversary of
the Effective Date. Notwithstanding the foregoing, if a Change
of Control occurs within 180 days after the Date of
Termination, and either (x) the arithmetic average of the Fair
Market Values per share of Common Stock as of each day in any
period of 30 consecutive days prior to the Change of Control
Date or (y) the Fair Market Value per share of Common Stock as
of the Change of Control Date, shall equal or exceed the
Target Price Per Share, then all of the Restricted Shares that
have not become vested pursuant to the preceding sentence of
this Section 4(d)(i) shall become vested as of the Change of
Control Date. Any Restricted Shares that do not become vested
pursuant to the immediately preceding two sentences of this
Section 4(d)(i) shall be forfeited to the Company (without any
action on the part of the Company or the Executive) on the
180th day following the Date of Termination, and the Executive
shall have no further rights with respect to such Restricted
Shares.
(ii) If the Executive's employment with the Company is terminated by
reason of death or disability as provided in Section 5(b) hereof,
then, as of the Date of Termination, the portion of the
Restricted Shares that have not vested at the Date of Termination
equal to the number of such unvested Restricted Shares multiplied
by a fraction, the numerator of which is 24 minus the number of
full months remaining in the Term after the Date of Termination
and denominator of which is 24, shall become vested, and the
restrictions im-
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posed thereon shall lapse. The balance of such unvested
Restricted Shares shall be forfeited to the Company (without
further action on the part of the Company or the Executive) as
of the Date of Termination, and the Executive shall have no
further rights with respect to such balance.
(iii) If the Executive's employment with the Company is terminated (A)
by the Executive without Good Reason, or (B) by the Company for
Cause, then, as of the Date of Termination, all of the Restricted
Shares that have not vested as of the Date of Termination shall
be forfeited to the Company (without any further action on the
part of the Company and the Executive), and the Executive shall
have no further rights with respect to such Restricted Shares.
(e) DELIVERY OF SHARE CERTIFICATES. Upon the vesting of any
Restricted Shares, the certificates evidencing such Restricted Shares shall
be delivered promptly to the Executive. In the case of Executive's death,
such certificates will be delivered to the beneficiary designated in writing
by the Executive pursuant to a form of designation provided by the Company,
to the Executive's legatee or legatees, or to his personal representatives or
distributees, as the case may be. Unless registered under the Securities Act
of 1933, as amended, certificates evidencing the Restricted Shares shall bear
the following legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNLESS, IN THE OPINION OF COUNSEL
FOR THE COMPANY, SUCH REGISTRATION IS NOT REQUIRED.
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8. LEGAL FEES; REIMBURSEMENT OF CERTAIN EXPENSES
The Company shall promptly reimburse the Executive for the
reasonable legal fees and expenses incurred by the Executive in connection
with (i) the negotiation, preparation and implementation of this Agreement,
the Stock Option Agreement, the Registration Rights Agreement, dated the date
hereof, between the Company and the Executive (the "Registration Rights
Agreement") and any additional documents or instruments related thereto, and
any transactions contemplated thereby and (ii) enforcing or defending any
right or benefit of the Executive pursuant to this Agreement, the Stock
Option Agreement, the Registration Rights Agreement or any additional
documents or instruments related thereto, or any transaction contemplated
thereby; provided that the Company shall have no obligation to reimburse the
Executive for any fees and expenses described in clause (ii) above unless the
resolution of any action taken by the Executive to enforce or defend such
right or benefit is in favor of the Executive. In addition, the Company
hereby agrees that the amount of any such legal fees and expenses reimbursed
to the Executive under clauses (i) and (ii) above shall not be taken into
account by the Company in determining the aggregate compensation paid or
payable to the Executive under this Agreement.
9. INDEMNIFICATION
The Company shall indemnify the Executive (and his legal
representatives), unless expressly prohibited by applicable law, against all
losses, claims, damages, liabilities, costs, charges and expenses incurred or
sustained by him or his legal representatives in connection with any action,
suit or proceeding to which he (or his legal representatives) may be made a
party by reason of his being or having been a director, officer or employee
of the Company (including payment of expenses in advance of the final
disposition of the proceeding). The Company further agrees, upon demand by
the Executive, promptly to reimburse the Executive for, or pay, any loss,
claim, damage, liability or expense, unless expressly prohibited by
applicable law, to which the Company has agreed to indemnify the Executive
pursuant to Sections 8 and 9 hereof. If any action, suit or proceeding is
brought or threatened against the Executive in
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respect of which indemnity may be sought against the Company pursuant to the
foregoing, the Executive shall notify the Company promptly in writing of the
institution of such action, suit or proceeding. Such action, suit or
proceeding shall be defended by and be under the exclusive control of the
Company and its counsel; except that the Executive shall have the right to
designate separate counsel, acceptable to the Executive in his sole
discretion, and, to the extent of a conflict of interest with the Company,
the right to direct, control and supervise the Executive's defense of such
action, suit or proceeding.
10. TAXES
The Company shall deduct from all amounts payable under this
Agreement all federal, state, local and other taxes required by law to be
withheld with respect to such payments.
11. CONFIDENTIALITY AND NONCOMPETITION
(a) Unless otherwise required by law or judicial process, the
Executive shall keep confidential all confidential information known to the
Executive concerning the Company and its businesses during his employment
with the Company and for the shorter of three (3) years following the
termination of the Executive's employment with the Company or until such
information is publicly disclosed by the Company or otherwise becomes
publicly disclosed other than through the Executive's actions; provided, that
the Executive shall provide notice to the Company in advance of any
disclosure required by law or judicial process in a timely manner to permit
the Company to oppose such compelled disclosure.
(b) The Executive agrees that during his employment with the
Company and for a period of two (2) years thereafter, he shall not, directly
or indirectly, as a principal, officer, director, employee or in any other
capacity whatsoever, without the prior written consent of the Company, engage
in, or be or become interested or acquire any ownership of any kind in, or
become associated with, or make loans or advance property to any person
engaged in or about to engage in, any business activity that is competitive
with any of the businesses engaged in by the Company during the Term in any
of the
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geographic areas in which such businesses are then conducted by the Company
or have been conducted by the Company during the twelve months preceding the
termination of the Executive's employment. Nothing in this Agreement shall
prevent the Executive from making or holding any investment in any amount in
securities traded on any national securities exchange or traded in the over
the counter market, provided said investments do not exceed one percent (1%)
of the issued and outstanding stock of any one such corporation. The
Executive agrees that during his employment and for an additional period of
two (2) years thereafter, the Executive shall not, directly or indirectly,
employ or seek to employ any employee of the Company or any of its
subsidiaries or affiliates or otherwise cause or induce any employee of the
Company or any of its subsidiaries or affiliates to terminate such employee's
employment with the Company or such subsidiary or affiliate for the
employment of another company. Notwithstanding the preceding sentence, the
Executive may employ any employee of the Company or any of its subsidiaries
or affiliates if (i) such employee was not an employee of the Company or any
of its subsidiaries or affiliates on the date hereof, (ii) the employment of
such employee by the Executive does not cause an early termination by such
employee of any written agreement that such employee may have with the
Company or any of its subsidiaries or affiliates and (iii) the Executive
shall not have directly or indirectly solicited or induced such employee to
terminate such employee's employment with the Company or any of its
subsidiaries or affiliates.
12. STANDSTILL PROVISIONS
(a) The Executive agrees that during the Standstill Period (as
defined below), without the prior approval of a majority of the Board of
Directors of the Company (excluding the Executive), the Executive shall not,
and the Executive shall cause each of his Affiliates (as defined below) not
to, directly or indirectly:
(i) acquire, offer or propose to acquire, or agree to acquire
(except, in any case, by way of stock dividends or other distributions or
offerings made available to holders of any Voting Securities (as defined
below) generally, provided that any such distributed securities shall be
subject to the
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provisions hereof), directly or indirectly, whether by purchase, tender
or exchange offer, through the acquisition of control of another Person
(as defined below), by joining a partnership, limited partnership,
syndicate or other "group" (within the meaning of Section 13(d)(3) of
the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise,
any Voting Securities, provided that the Executive and his Affiliates
may acquire additional Voting Securities through open market or
privately negotiated purchases so long as the effect of such acquisition
would not cause the Executive and his Affiliates to beneficially own
more than an aggregate of five percent (5%) of the outstanding Voting
Securities, provided that any Affiliate of the Executive that owns or
acquires any Voting Securities shall agree in writing to be bound by the
provisions of this Section 12 with respect to such Voting Securities,
and provided further that nothing in this Section 12 shall prevent the
exercise of options that the Executive has acquired as permitted by this
Section 12(a)(i);
(ii) make, or in any way participate, directly or indirectly, in any
"solicitation" (as such term is used in the proxy rules (the "Proxy Rules")
of the Securities and Exchange Commission as in effect on the date hereof)
of proxies or consents (whether or not relating to the election or removal
of directors), seek to advise, encourage or influence any Person with
respect to the voting of any Voting Securities, initiate, propose or
otherwise "solicit" (as such term is used in the Proxy Rules) shareholders
of the Company, or otherwise communicate with shareholders or others
pursuant to Rule 14a-1(1)(2)(iv) of the Proxy Rules in respect of any proxy
or consent solicitation, in each case other than on behalf of the Company
or the Board, provided that nothing herein shall limit the right of the
Executive to vote any Voting Securities owned by him;
(iii) seek, propose or make any public statement with respect to any
merger, business combination tender or exchange offer, sale or purchase of
assets, sale or purchase of securities (except with respect to the Voting
Securities owned by the Execu-
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tive), dissolution, liquidation, restructuring, recapitalization or
similar transaction of or involving the Company or any of its
Affiliates, except in a manner that is consistent with the Executive's
capacity as an officer and member of the Board of Directors of the
Company or as a holder of Voting Securities; and
(iv) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect to any Voting
Securities, other than groups consisting solely of the Executive and his
Affiliates.
(b) Nothing contained in this Section 12 shall be deemed in any
way to prohibit or limit the lawful activities of the Executive in his
capacity as a director of the Company, regardless of whether such actions are
taken at a meeting of the Board of Directors (or any committee thereof) or
otherwise.
(c) The Executive shall not be in breach of or in default under
the provisions of Section 12(a)(i) hereof, and shall not be required to
dispose of any Voting Securities, if the aggregate Voting Securities
beneficially owned by the Executive and his Affiliates is increased to more
than five percent (5%) of the outstanding Voting Securities solely as a
result of a recapitalization of the Company or a repurchase of securities by
the Company or any other action taken by the Company or its Affiliates.
(d) "Affiliate" shall have the meaning provided in Rule 12b-2,
promulgated under the Exchange Act, and shall include "Associates" as defined
in Rule 12b-2, provided that the Company shall not be deemed to be an
Affiliate of the Executive.
(e) "Person" shall mean any individual, group, corporation,
partnership, firm, government or agency or political subdivision thereof or
other entity of whatever nature.
(f) "Standstill Period" shall mean the period commencing on the
first day of the Term and ending on the second anniversary of the last day of
the Term.
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(g) "Voting Securities" shall mean the shares of Common Stock and
any other securities of the Company that are entitled to vote generally in
the election of directors or any other securities (including, without
limitation, rights and options) convertible into, exchangeable for or
exercisable for, any of the foregoing (whether or not presently convertible,
exchangeable or exercisable) (any such other securities being "Convertible
Securities"). For the purpose of calculating the percentage of Voting
Securities beneficially owned by a Person, Convertible Securities
beneficially owned by any such Person shall be deemed to be converted,
exchanged or exercised and shall represent the number of shares of Common
Stock (or other securities of the Company entitled to vote generally in the
election of directors) into which such Convertible Securities (disregarding
for such purposes any restrictions on conversion, exchange or exercise) are
then convertible, exchangeable or exercisable. All Voting Securities at any
time beneficially owned by the Executive and his Affiliates during the
Standstill Period shall be subject to all terms, provisions and restrictions
contained in this Section 12.
13. SUCCESSORS; BINDING AGREEMENT
(a) This Agreement shall be binding upon and inure to the benefit
of the Company and any successor of the Company, including, without
limitation, any corporation or corporations acquiring directly or indirectly
all or a substantial portion of the stock, business or assets of the Company,
whether by merger, consolidation, sale or otherwise (and such successor shall
thereafter be deemed the "Company" for the purposes of this Agreement).
(b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die while any
amounts would be still payable to him hereunder if he had continued to live,
all such amounts, unless otherwise provided hereunder, shall be paid in
accordance with the terms of this Agreement to the Executive's devisee,
legatee, or other beneficiary or, if there be no such beneficiary, to the
Executive's estate.
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14. NOTICE
For purposes of this Agreement, notices, demands and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given (i) when hand delivered, (ii) when sent if
sent by overnight mail, overnight courier or facsimile transmission or (iii)
when mailed by United States certified mail, return receipt requested,
postage prepaid, addressed as follows:
IF TO THE EXECUTIVE:
Richard R. Nicolosi
4408 Intracoastal Drive
Highland Beach, Florida 33487
IF TO THE COMPANY:
Samsonite Corporation
11200 East Forty-Fifth Avenue
Denver, Colorado 80239
Attention: Board of Directors
c/o Corporate Secretary
(with a copy to the attention of General
Counsel at the same address)
(in each case with a copy to Gregory A. Fernicola, Esq., at Skadden, Arps,
Slate, Meagher & Flom, 919 Third Avenue, New York, New York 10022 and Howard
G. Kristol, Esq., at Reboul, MacMurray, Hewitt, Maynard & Kristol, 45
Rockefeller Plaza, New York, New York 10111) or to such other address as any
party may have furnished to the others in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.
15. SURVIVORSHIP
The respective rights and obligations of the parties hereunder set
forth in Sections 4, 6, 7, 8, 9, 10 and 11 of this Agreement shall survive
any termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.
16. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that (a) it is fully authorized
and empowered to enter into this
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Agreement and that its Board has approved the terms of this Agreement, (b)
the execution of this Agreement and the performance of its obligations under
this Agreement shall not violate or result in a breach of the terms of any
material agreement to which the Company is a party or by which it is bound,
(c) no approval by any governmental authority or body is required for it to
enter into this Agreement, (d) this Agreement is valid, binding and
enforceable against the Company in accordance with its terms, except to the
extent affected or limited by applicable bankruptcy laws or other statutes
governing the rights of creditors generally and any regulations or
interpretations thereof, and (e) the Restricted Shares upon their issuance to
the Executive as provided herein, will constitute duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock of the Company,
subject only to the rights of the Company specified in Section 7 hereof. The
Executive represents and warrants that his execution of this Agreement and
his performance of his duties and responsibilities under this Agreement shall
not violate or result in a breach of the terms of any material agreement to
which he is a party or by which he is bound.
17. MISCELLANEOUS
(a) ENTIRE AGREEMENT. The parties hereto agree that this
Agreement and the Stock Option Agreement referred to in Section 4(d) hereof
contain the entire understanding and agreement between them, and supersedes
all prior understandings and agreements between the parties respecting the
employment by the Company of the Executive, and that the provisions of this
Agreement may not be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by the parties
hereto. Nothing contained herein shall supersede or otherwise modify the
rights and obligations of the Company or the Executive under the Stock Option
Agreement. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have
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been made by either party which are not set forth expressly in this Agreement.
(b) WAIVER. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.
(c) CHOICE OF LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
New York without giving effect to the conflict of laws principles thereof.
18. VALIDITY
The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any
other provision or provisions of this Agreement, which shall remain in full
force and effect.
19. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company has caused its name to be
subscribed to this Agreement by its duly authorized representative and the
Executive has executed this Agreement as of the date and the year first above
written.
SAMSONITE CORPORATION
By: /s/ Robert H. Falk
------------------------------------
Name: Robert H. Falk
Title: Asst. Secretary
/s/ Richard R. Nicolosi
---------------------------------------
Richard R. Nicolosi
May 15, 1996
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