AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

 

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                                                                  Exhibit 10.108

 

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

          AMENDED and RESTATED AGREEMENT made the 17th day of March 2004, by and

between QUAKER FABRIC CORPORATION, a Delaware corporation with its principal

office at 941 Grinnell Street, Fall River, Massachusetts 02721 (the "Company"),

and LARRY A. LIEBENOW ("Employee").

 

                              W I T N E S S E T H:

 

          WHEREAS, Employee has been employed by the Company as its President

and Chief Executive Officer pursuant to an employment agreement, dated as of

March 12, 1993, as amended by Amendment No. 1 dated as of February 24, 1997, and

Amendment No. 2 dated as of December 17, 1999 (the "Existing Agreement");

 

          WHEREAS, the Company wishes to continue the employment of Employee as

President and Chief Executive Officer of the Company and Employee desires to

continue such employment;

 

          WHEREAS, the parties wish to incorporate the two prior amendments,

further modify certain of the terms of the Existing Agreement, supersede the

Existing Agreement in its entirety, and restate the Existing Agreement as set

forth herein (such restated agreement, this "Agreement").

 

          NOW THEREFORE, in consideration of the mutual covenants and mutual

promises herein contained, and other good and valuable consideration, it is

hereby covenanted and agreed by and between the parties hereto as follows:

 

          1. (a) Subject to the terms and conditions set forth herein, the

Company hereby employs Employee as the President and Chief Executive Officer of

the Company. Employee agrees to devote his entire working time during the Term

hereof to the performance of his duties hereunder and to the furtherance of the

business and interests of the Company, and to perform his duties to the best of

his ability in a diligent manner. The services to be performed by Employee shall

be performed primarily at the Company's principal office in Fall River,

Massachusetts, on behalf of the Company. If Employee is required to travel, all

travel may be in first class accommodations.

 

               (b) During the Term of this Agreement and for a period of 12

months after termination of this Agreement, Employee will not, directly or

indirectly, enter into the employ of, render any service to, or perform any duty

whatsoever for, any other person, firm, partnership, association, corporation,

or any other entity which is then competing with the Company, whether as a

consultant, advisor, employee, officer, director or in any other capacity

whatsoever, and regardless of whether or not any remuneration has been, is

being, or will be received therefor, without the prior written consent of the

Company (any such activity,

 

 

 

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"Competition"). Notwithstanding the foregoing, in the event that Employee (i)

voluntarily terminates his employment and (ii) declines to make the election

described in the second sentence of Section 6(c) of this Agreement, the

restriction discussed in this Section 1(b) shall cease to apply from and after

the date of such employment termination.

 

          2. (a) The Term of this Agreement shall continue until March 12, 2008,

subject to extension and termination as provided herein. The Term shall be

extended for additional periods of three years each, after March 12, 2008,

unless the Company notifies Employee in writing, received by Employee at least

one year prior to the commencement of each three-year extension period, that the

three-year extension period will not be included in the Term. For example, the

Term shall be extended for a period of three years after March 12, 2008, which

shall be to March 12, 2011, unless the Company notifies Employee in writing,

received by Employee by March 12, 2007, that the three-year period shall not be

added to the Term. The Term of this Agreement shall include the current period

plus each three-year extension period.

 

               (b) Employee shall have the right to terminate his employment at

any time, effective six months after receipt of written notice by the Company to

that effect. The Company shall have the right to terminate the employment of

Employee only for cause. For purposes of this Agreement, "for cause" shall mean:

(i) willful insubordination to a board resolution after a written demand for

substantial performance is delivered to Employee by the Company, which demand

specifically identifies the manner in which the Company believes that Employee

has not substantially performed his duties or responsibilities; (ii) material

breach of this Agreement after a written demand for substantial performance is

delivered to Employee by the Company, which demand specifically identifies the

manner in which the Company believes that Employee has breached this Agreement;

(iii) acts or omissions intentionally and materially inimical to the Company

after a written demand for cessation of such conduct is delivered to Employee by

the Company, which demand specifically identifies the manner in which the

Company believes that Employee has engaged in such conduct and the injury to the

Company; (iv) gross negligence, after written demand for cessation of such

conduct is delivered to Employee by the Company, which demand specifically

identifies the manner in which the Company believes that Employee has engaged in

such conduct; or (v) conviction of a crime involving moral turpitude.

 

          3. (a) For the services to be rendered by Employee to the Company

during the Term, the Company agrees to pay Employee a base salary (the "Base

Salary") payable in equal installments on the regular payroll dates of the

Company at the annual rate of $693,400.00 per annum, retroactive to January 1,

2004. The Base Salary to be paid to Employee by the Company during each calendar

year of the Term shall be the Base Salary paid for the prior calendar year, plus

such increase as may be agreed upon at the beginning of each calendar year.

 

               (b) Employee shall also be entitled to receive an annual bonus in

such amount as may be determined by the Board of Directors.

 

               (c) The Company shall withhold social security tax, and the

appropriate federal, state and any local income or employment taxes on all

payments made by the Company to Employee hereunder.

 

 

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               (d) Employee will be reimbursed for reasonable expenses he incurs

on behalf of the Company in accordance with the Company's policy for

reimbursement of expenses, provided, however, that Employee submits to the

Company reasonably detailed expense reports, including vouchers and invoices, in

support of such expenses.

 

               (e) The parties agree that Employee shall be entitled (i) to six

weeks vacation annually during the Term of this Agreement, (ii) to continue to

participate in the Company's non-qualified deferred compensation plan, and (iii)

to the other fringe benefits, such as medical plan, life insurance, profit

sharing, executive stock option plan, etc., provided by the Company to its

senior executives. The life insurance coverage provided by the Company to

Employee (which shall be in addition to such coverage as is generally provided

by the Company to its senior executives), for the benefit of beneficiaries

designated by Employee, shall be for an annual insurance premium of not less

than $7,000 and not greater than $15,000. The Company also agrees to pay for the

country club dues of Employee at one country club of his choice.

 

               (f) The Company agrees to provide to Employee the exclusive use

of an automobile selected by Employee, at a cost (including base lease or

similar payment and expenses relating to operation and maintenance of such

payment) to the Company not to exceed $1,250 per month, which automobile may be

replaced, at the option of Employee, with a new automobile no more frequently

than once every three years.

 

          4. Employee hereby warrants and represents that Employee is not a

party to any contract with any person, firm or corporation providing for the

employment of Employee or providing for Employee to render any services

whatsoever, and there is no impediment to, or restriction upon, Employee's

entering into this Agreement with the Company or Employee fully performing the

terms of this Agreement.

 

          5. Employee shall during the Term of this Agreement and for one year

after termination of this Agreement, or expiration of this Agreement, not

divulge to any person, and shall during the Term of this Agreement use his best

efforts to prevent the publication or disclosure of, any confidential

information concerning the business accounts or finances of the Company or any

of the confidential financial information, trade secrets, dealings, transactions

or affairs of the Company, or any officer or shareholder of the Company, which

have come to the knowledge of Employee during the Term of this Agreement.

 

          6. (a) If Employee dies or becomes so disabled or incapacitated

because of physical or mental disability that he shall be unable to perform the

services hereunder, the Company agrees to continue to pay Employee's Base Salary

through the end of the then current Term of this Agreement; provided, however,

that if death or disability occurs within a time period which is less than six

months before the expiration date of the then current Term, the Company agrees

to pay Employee in the event of disability, or Employee's estate in the event of

death, an amount equal to his Base Salary for a six month period plus any bonus

paid or payable with respect to the prior year. In addition, the Company shall

pay or provide to Employee any incurred but unreimbursed business expenses for

the period prior to termination payable in accordance with the Company's

policies, any base salary, bonus, vacation pay or other deferred compensation

accrued or earned under law or in accordance with the Company's policies

applicable to Employee but not yet paid and any other amounts or benefits due

under any

 

 

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applicable employee benefit, equity or incentive plans (the "Accrued Benefits").

Following the date of termination, the Company shall pay the premiums for

Employee (except in the case of Employee's death) and Employee's dependents'

health and welfare coverage (including, without limitation, medical, dental,

and, to the extent applicable, life insurance coverage) for five (5) years from

the date of termination of Employee's employment under the Company's health and

welfare plans which cover Employee or materially similar benefits, subject, in

all cases, to Employee's (or dependent's, if applicable) payment of customary

premiums in effect prior to the date of termination (such five-year coverage,

"Continuation Coverage").

 

               (b) Upon termination of Employee's employment by the Company for

cause (other than pursuant to Section 2(b)(v)), Employee shall be entitled to

receive (i) any Accrued Benefits and (ii) Continuation Coverage.

 

               (c) Upon termination of employment of Employee for any reason

(including a voluntary termination of employment by Employee) other than a

termination for cause or a termination described in Section 6(d), Employee shall

be entitled to receive: (i) a lump sum payment equal to three times the sum of

(x) Employee's Base Salary for the year ending immediately prior to the year in

which the date of termination occurs and (y) the bonus paid or payable to the

Employee with respect to such prior year, subject to the immediately following

sentence; (ii) any Accrued Benefits; and (iii) Continuation Coverage. In the

event that Employee voluntarily terminates his employment, he shall be eligible

for the benefit set forth in clause (i) of the immediately preceding sentence

solely if he elects in writing, in a form reasonably acceptable to the Company,

within three days after the date of his employment termination, not to engage in

Competition during the three-year period commencing on the date of termination.

For such purposes, during the period from the first anniversary of the date of

termination to the third anniversary thereof (the "Balance Period"), businesses

deemed to be competing with the Company under the definition of "Competition"

(as defined in Section 1(b) of this Agreement) shall be limited to businesses

that manufacture furniture coverings, including, without limitation, fabrics,

leathers, flocks or prints. It is expressly acknowledged that during the Balance

Period Employee will not be deemed to have engaged in Competition by reason of

providing services to a customer or supplier of the Company.

 

               (d) Upon the occurrence of a Change in Control (as defined in

Exhibit A) all stock options held by Employee shall immediately vest in full. In

addition, upon termination of employment by the Company without cause or by

Employee for Good Reason (as defined in Exhibit A) during the period beginning

on the date of the Change in Control and ending one (1) year after the date of

such Change in Control, Employee shall be entitled to receive: (i) a lump sum

payment equal to three times the highest annual Base Salary paid by the Company

to Employee at any time prior to the Change in Control and three (3) times the

annual bonus paid, or required to be paid, by the Company to Employee for the

year preceding the year in which the Change in Control occurs; (ii) any Accrued

Benefits; and (iii) Continuation Coverage, with such Continuation Coverage

commencing on the later of the date of the Change in Control or the date of

termination, with the customary premiums payable by Employee for such coverage

those in effect prior to the Change in Control; and (iv) job outplacement at a

level and of a type appropriate for senior-level executives in an amount not to

exceed $20,000. In addition, notwithstanding the foregoing, in the event

Employee is terminated without cause or terminates employment for Good Reason

within ninety (90) days prior to the occurrence of a

 

 

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