EXHIBIT 10.1
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“ Agreement ”) is effective as of the 6th day of
August, 2008, between Phoenix Footwear Group, Inc. (the “
Company ”), and James R. Riedman (the “
Executive ”).
In consideration of the promises and
covenants set forth below, the parties hereto agree as
follows:
1. Employment. The
Company hereby agrees to employ Executive, and Executive hereby
agrees to accept such employment with the Company, on the terms and
conditions set forth herein.
2. Term. The
employment of Executive by the Company as provided in this
Agreement commenced on the date hereof, and shall end on
August 6, 2010 (“ Expiration Date ”),
unless sooner terminated as provided in Section 5. If not so
terminated, then on August 6, 2010, and on the 6th day of
August of each year thereafter (each also an “ Expiration
Date ”), the term of Executive’s employment
hereunder shall automatically be extended for one additional
year.
3. Position and
Duties.
(a) Chairman of the Board .
Executive shall serve as Chairman of the Board of the Company or
such other position or positions as may be agreed upon by Executive
and the Company’s Board of Directors.
(b) Duties . Executive shall
at all times perform his duties and obligations faithfully and
diligently and shall devote all of his business time, attention and
efforts exclusively to the business of the Company and its related
entities. Executive shall industriously perform his duties under
the supervision of and report to the Board of Directors of the
Company and shall accept and comply with all directions from and
all policies established from time to time by the Board of
Directors of the Company. Executive’s areas of emphasis,
working closing with the CEO, shall include, without limitation,
responsibility for the Company’s: strategic planning,
investor relations, banking and financing related relationships,
acquisitions and divestures and acting as liaison between the
Company’s management and the Board of Directors and such
other duties as may from time to time be prescribed by the Board of
Directors of the Company. Executive shall promote the trade and
business of the Company and its related entities to the best of his
ability and shall adhere to the Company’s policies and
procedures applicable to the Company’s employees
generally.
(c) Other Activities.
Executive shall not directly or indirectly render any services of a
business, commercial or professional nature to any other person,
entity or organization, whether for compensation or otherwise, that
would interfere with or impair his timely and proper performance of
his duties and responsibilities hereunder. The foregoing shall not
preclude Executive from (i) serving on boards of trade
associations and/or charitable organizations or (ii) engaging
in charitable activities and community affairs, with the prior
consent of the Board and provided that such activities and
directorships do not interfere with or impair his timely and proper
performance of Executive’s duties and responsibilities
hereunder.
4. Compensation and Related
Matters.
(a) Salary. During the term
of Executive’s employment hereunder, the Company shall pay to
Executive a salary of $335,000 per annum, subject to increase (but
not decrease) in the sole discretion of Board of Directors based on
performance and salary reviews of Executive in accordance with
Company policy. Such salary shall be paid in equal monthly
installments (or such shorter intervals as the Company may elect).
Executive’s salary shall be subject to annual review by the
Company’s Board of Directors or its Compensation
Committee.
(b) Bonus. During the term of
Executive’s employment hereunder, Executive shall be eligible
for such bonuses as may be determined and approved by the Board of
Directors or its Compensation Committee from time to
time.
(c) Vacations. During the
term of Executive’s employment hereunder, Executive shall be
entitled to four weeks (20 days) of vacation each year, earned at
the rate of 1.66 vacation days for each month of active service.
The maximum amount of vacation that can be earned is 25 days, at
which point no additional vacation is earned until the earned
amount is below such maximum amount.
(d) Medical Insurance and Other
Benefits. During the term of Executive’s employment
hereunder, Executive will be entitled to participate in any
medical, dental and disability insurance plans, life insurance
plans, retirement plans and other employee welfare and benefit
plans or programs on the same terms as the Company’s other
senior-level executives, as such plans and programs may be in
effect from time to time.
(e) Expenses. During the term
of Executive’s employment hereunder, Executive shall be
entitled to receive reimbursement for all reasonable out-of-pocket
travel and other expenses incurred by Executive in performing
Executive’s services hereunder, provided that:
(i) Each such expenditure is of a
nature qualifying it as a proper business expenditure of the
Company and is approved by the Company; and
(ii) Executive furnishes to the
Company adequate documentary evidence for the substantiation of
such expenditures and Executive otherwise complies with Company
policies with respect to expense reimbursement.
5.
Termination.
(a) Agreement Terminable at
Will. Notwithstanding anything herein to the contrary, this
Agreement and Executive’s employment with the Company are
terminable at will by the Company for any reason, with or without
prior notice or cause, provided, however, that Executive’s
entitlement to payments and benefits following such termination
will depend on the type of termination and shall be governed by the
following provisions of this Section 5. Upon termination for
any reason, Executive hereby agrees that his membership on the
Board also ends and will sign any document requested by Company to
implement such ending.
-2-
(b) Termination for Cause
.
(i) The Company may terminate this
Agreement and Executive’s employment hereunder for “
Cause ” pursuant to the provisions of this
Section 5(b). Executive shall be given notice by the Board of
Directors of the grounds for its intention to terminate Executive
for Cause, and the Board shall give Executive an opportunity to
address with the Board, the grounds on which the proposed
termination for Cause is based. If Cause is cured to the
Board’s satisfaction within twenty (20) days of such
notice, a termination for Cause will not be implemented. For
purposes of this Agreement, the Company shall have
“Cause” to terminate Executive’s employment
hereunder upon:
(A) Executive’s refusal to
comply with lawful written instructions of the Board regarding
specific actions Executive must do or not do;
(B) Executive’s engagement in
an act of dishonesty or falsification or any transaction involving
a material conflict of interest which was not disclosed to and
approved by the Company’s Board of Directors; or
(C) Executive’s use of illegal
narcotics; or
(D) Executive’s engagement in
theft, embezzlement, fraud, misappropriation of funds, or other act
involving moral turpitude; or
(E) Executive’s engagement in
any violation of law relating to Executive’s employment by
the Company.
(ii) If this Agreement is terminated
by the Company for Cause pursuant to this Section 5(b), the
Company shall have no further obligation or liability to Executive,
except that Executive shall be entitled to receive only
(A) the portion of Executive’s salary then in effect
which has been earned up to the Date of Termination,
(B) compensation for any accrued and unused vacation up to the
Date of Termination, and (C) reimbursement, pursuant to
Section 4(d) for business expenses incurred up to the Date of
Termination (collectively, the “ Minimum Payments
”).
(c) Death.
(i) This Agreement and
Executive’s employment hereunder shall terminate
automatically upon Executive’s death.
(ii) If this Agreement is terminated
because of Executive’s death pursuant to this
Section 5(c), the Company shall have no further obligation or
liability to Executive, except that Executive shall be entitled to
receive only (i) the Minimum Payments, and (ii) any life
insurance proceeds Executive is otherwise entitled to under any
applicable life insurance in effect on the Date of
Termination.
(d) Disability.
(i) If Executive becomes disabled
during Executive’s employment hereunder, this Agreement and
Executive’s employment hereunder shall terminate. As used
herein,
-3-
“disability” shall mean any
condition that qualifies as a disability under the Company’s
long-term disability plan as in effect on the date of determination
and which renders Executive incapable of performing his
responsibilities hereunder for one hundred twenty (120) days
or more in the aggregate during any 12-month period, and which at
any time after such ninety (90) days the Company’s Board
of Directors shall determine continues to render Executive
incapable of performing such responsibilities.
(ii) If this Agreement is terminated
because of Executive’s disability pursuant to this
Section 5(d), the Company shall have no further obligation or
liability to Executive, except that Executive shall be entitled to
receive only (i) the Minimum Payments, and (ii) any
benefits to which Executive is entitled under the Company’s
long-term disability plan as in effect on the Date of
Termination.
(e) Termination Other Than for
Cause, Death or Disability.
(i) The Company shall, for any
reason, be entitled to terminate this Agreement and
Executive’s employment hereunder at any time without Cause
and other than on account of Executive’s death or
disability.
(ii) If this Agreement is terminated
by the Company pursuant to this Section 5(e) or by Executive
pursuant to Section 5(f) below, the Company shall have no
further obligation or liability to Executive, except that Executive
shall be entitled to receive only (i) the Minimum Payments,
and (ii) the Non-Compete Payments (as defined in
Section 7(d) below). Executive shall only be entitled to
receive such payments from the Company upon execution and delivery
to Company of a general release in a form acceptable the
Company.
(f) Resignation for Good
Reason .
(i) Executive shall be entitled to
terminate this Agreement and Executive’s employment hereunder
at any time for Good Reason pursuant to the provisions of this
Section 5(f). For purposes of this Agreement, Executive shall
have “ Good Reason ” to terminate
Executive’s employment hereunder if without Executive’s
express consent, the Company reduces Executive’s duties and
responsibilities such that it results in a material adverse
reduction in Executive’s position, authority or
responsibilities, and the Company fails to cure such reduction in
duties and responsibilities within twenty (20) days after its
receipt of written notice from Executive specifying the particular
acts objected to and the specific cure requested by
Executive.
(ii) If this Agreement is terminated
by Executive for Good Reason pursuant to this Section 5(f),
the Company shall have no further obligation or liability to
Executive, except that Executive shall be entitled to receive the
same payments set forth in Section 5(e)(ii) above for a
termination without Cause. Executive shall only be entitled to
receive such payments from the Company upon execution and delivery
to Company of a general release in a form acceptable the
Company.
(g) Resignation without Good
Reason .
(i) Executive shall be entitled to
terminate this Agreement and Executive’s employment hereunder
without Good Reason at any time on thirty (30) days prior
written notice delivered by Executive to the Company.
-4-
(ii) If this Agreement is terminated
by Executive pursuant to this Sec
