Exhibit
10.3
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT dated as of March 1, 2007 between
SWANK, INC., a Delaware corporation with an address at 90 Park
Avenue, New York, New York 10016 (the “ Corporation
”), and ERIC P. LUFT, residing at 15 Fenimore Lane,
Huntington, New York 11743 (“ Employee
”).
W
I T N E S S E T H:
WHEREAS,
Employee has been in the employ of the Corporation for more than 20
years; and
WHEREAS,
Employee and the Corporation are parties to an Amended and Restated
Employment Agreement dated December 18, 2003 (as amended to date,
the “ Current Employment Agreement ”) and wish
to amend certain provisions of the Current Employment Agreement and
to restate the Current Employment Agreement, as so amended, in its
entirety.
NOW,
THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Corporation
and Employee hereby agree as follows:
1.
Employment and Term .
The
Corporation hereby employs Employee, and Employee hereby accepts
employment by the Corporation, on the terms and conditions herein
contained, to perform the duties described in paragraph 2 for a
term (the “ Employment Ter m”) commencing on
March 1, 2007 (the “ Commencement Date ”) and,
subject to the remaining provisions of this Agreement, ending on
February 28, 2010. On February 28, 2010 and on each subsequent
February 28, 2010 (or February 29 in the event of a leap year), the
Employment Term, as previously extended, if applicable,
automatically shall be extended, subject to the remaining
provisions of this Agreement, for an additional period of one (1)
year, from and including the next March 1 to and including the last
day of the month of February in the following calendar year, unless
either Employee or the Corporation shall give the other party not
less than thirty (30) days’ written notice prior to February
28, 2010, or thereafter, prior to the last day of any such
subsequent February, as the case may be, that the Employment Term
shall not be so extended. In the event that either party shall give
the other such written notice, the Employment Term, as previously
extended, if applicable, shall not be further extended beyond the
then current expiration date of this Agreement and, except for
those provisions of this Agreement that by their respective terms
survive the termination or expiration hereof, this Agreement shall
terminate on such expiration date.
2.
Duties .
(a)
During the Employment Term, Employee shall serve as President of
the Corporation. Employee will perform such duties and
responsibilities as from time to time shall be designated in good
faith by the Corporation’s Chief Executive Officer and/or its
Board of Directors, which duties and responsibilities shall be
consistent with his duties and responsibilities prior to the date
hereof in his capacity as a Senior Vice President of the
Corporation. Employee shall report to, and shall be subject to the
direction and supervision of, the Corporation’s Chief
Executive Officer and the Board of Directors of the Corporation.
Employee shall serve the Corporation faithfully and to the best of
his ability and will devote his full business time and attention to
the business and affairs of the Corporation and its subsidiaries
except during vacation periods and periods of illness or
incapacity.
(b)
The Corporation and Employee acknowledge and agree that, while the
duties of Employee under this paragraph 2 are presently intended
primarily to be performed at the Corporation’s offices
located in the metropolitan New York City area (presently 90 Park
Avenue, New York, New York 10016), Employee shall spend such time
at the Corporation’s other offices, including those offices
located in Massachusetts, and otherwise travel in furtherance of
the business of the Corporation or the performance of Employees
duties and responsibilities hereunder, as the Board of Directors or
the Corporation’s Chief Executive Officer shall deem
necessary, in accordance with past practice.
3.
Compensation and Benefits .
(a)
During the Employment Term, in consideration for the full and
complete performance by Employee of his duties and obligations
under this Agreement, the Corporation agrees to pay Employee a
salary (“ Base Salary ”) at the rate of
$154,000, payable in accordance with the Corporation’s
regular pay intervals for its executive officers or in such other
manner as shall be mutually agreeable to Employee and the
Corporation. The Corporation’s Board of Directors may, in its
discretion, at any time and from time to time, increase the Base
Salary for Employee and grant Employee other compensation in
addition to that provided for hereby (in that regard, consistent
with past practices, Employee will be considered by the Corporation
for a salary increase and annual bonus compensation at the same
time as the other executive officers of the Corporation are
considered for a salary increase and such bonus compensation). The
Base Salary described herein and other amounts payable to Employee
hereunder are, in each case, a gross amount, and Employee
acknowledges and agrees that the Corporation shall be required to
withhold, and such Base Salary and other amounts shall be reduced
by, deductions with respect to applicable federal, state and local
taxes, FICA, unemployment compensation taxes and other required
taxes, assessments and withholdings.
(b)
During the Employment Term, in consideration for the full and
complete performance by Employee of his duties and obligations
under this Agreement, the Corporation also agrees to pay Employee,
for each calendar year during the Employment Term, commission
compensation (“ Commission Compensation ”) in an
amount equal to the greater of (i) $128,000
-2-
or (ii) .5% times Domestic Net
Sales (as hereinafter defined) of the Corporation. The term
“Domestic Net Sales” shall mean gross sales made to
customers whose principal executive offices are located in the
United States (“ US Customers ”), other than
sales to customers of the Special Markets division of the
Corporation (“ Special Market Sales ”) and other
than sales to US Customers that are intended for sale outside the
United States or that otherwise constitute export sales
(collectively, “ Export Sales ”), less, in each
case, all markdowns, discounts, returns, charge backs, discounts
and allowances taken or granted, as the case may be. The
determination as to whether a customer is a US Customer, and/or
whether sales constitute Special Market Sales and/or Export Sales,
shall be made in good faith by the Corporation. Commission
Compensation shall be calculated and shall be payable in such
manner (including, without limitation, whether Employee shall
receive monthly or other periodic draws against Commission
Compensation), and at such times, consistent with the manner of
calculation, manner and times in connection with the payment of
commission compensation to Employee on the date hereof.
(c)
During the Employment Term, Employee shall be entitled to
participate in any retirement, medical payment, disability, health
or life insurance and other similar benefit plans and arrangements
which may be or become available to executive officers of the
Corporation in general; provided , that Employee shall be
required to comply with the conditions attendant to coverage by
such plans and arrangements and shall comply with, and be entitled
to benefits only in accordance with, the terms and conditions of
such plans and arrangements.
(d)
Employee shall be entitled to reimbursement for expenses reasonably
incurred by him in furtherance of the business of the Corporation
and in the performance of his duties hereunder, on an accountable
basis with such substantiation as the Corporation may at the time
require from its executive officers.
(e)
During the Employment Term, the Corporation shall continue to
provide Employee with an automobile consistent with the current
arrangement with Employee and, upon the expiration of the current
lease for such automobile, the Corporation shall lease or otherwise
provide Employee with an automobile of equal value to that
currently leased by the Corporation and provided to
Employee.
(f)
Employee shall be entitled to four (4) weeks vacation in each year
during the Employment Term. Such vacation shall be taken at such
time or times as may be mutually agreed upon by the Corporation and
Employee and in accordance with the vacation policies and
procedures for employees of the Corporation as in effect from time
to time.
4.
Termination for Disability or Death .
(a)
If, during the Employment Term, in the good faith judgment of the
Corporation’s Board of Directors, Employee shall, because of
physical or mental illness or incapacity, become unable to perform
the duties and services required of him pursuant to this Agreement
for a period of 120 consecutive days or for a period of 150 days in
any 365-day period, the Corporation may, upon prior written notice
given at any time after the expiration of
-3-
such 120-day period or 150-day
period, as the case may be, to Employee of its intention to do so,
terminate this Agreement and the Employment Term to such date as
may be set forth in such notice. In case of such termination,
Employee shall be entitled to receive (i) his Base Salary through
the end of the month in which this Agreement and the Employment
Term shall be terminated, (ii) accrued but unpaid Commission
Compensation through the termination date, (iii) bonus
compensation, if any, that shall have been awarded to Employee
prior to such termination, but not paid to him prior to such
termination, plus (iv) an amount equal to (a) the sum of the Base
Salary and Commission Compensation paid to Employee for the
three-calendar year period ending on December 31 of the calendar
year immediately preceding his death, divided by (b) three
(3) (such amount, the “ Severance Base Amount
”). The Severance Base Amount provided for in clause (a)(iv)
shall be payable in installments in accordance with the
Corporation’s regular pay intervals for its executive
officers or in such other manner as shall be mutually agreeable to
Employee and the Corporation. The foregoing amounts shall be in
addition to amounts, if any, that shall be payable to Employee upon
his illness or incapacity under any disability insurance policy or
other disability plan of the Corporation.
(b)
If, during the Employment Term, Employee shall die,
Employee’s legal representatives shall be entitled to receive
(i) his Base Salary through the end of the month in which his death
shall occur, (ii) accrued but unpaid Commission Compensation
through the date of his death, (iii) bonus compensation, if any,
that shall have been awarded to Employee prior to his death, but
not paid to him prior to his death, plus (iv) an amount equal to
the Severance Base Amount. The Severance Base Amount provided for
in clause (b)(iv) shall be payable in installments in accordance
with the Corporation’s regular pay intervals for its
executive officers or in such other manner as shall be mutually
agreeable to Employee’s legal representatives and the
Corporation. If Employee shall die after the Employment Term but
during any period in which Employee shall be entitled to receive
amounts under paragraph 5(b) hereof, Employee’s legal
representatives shall be entitled to receive all amounts that
Employee would have been entitled to receive under paragraph
5(b).
5.
Termination by Corporation; Expiration of the Employment
Term ; Change of Control .
(a)
The Corporation may terminate this Agreement and the Employment
Term, without liability other than for payment of accrued but
unpaid Base Salary and Commission Compensation through the date
this Agreement shall terminate and the Employment Term ends,
“for cause.” The term “for cause” shall
mean (i) a willful refusal or failure (after not less than 14 days
notice by the Corporation to Employee that such refusal or failure
will result in termination of this Agreement and the Employment
Term) by Employee to perform, to the satisfaction of the
Corporation’s Chief Executive Officer or the Board of
Directors, determined in good faith, any duties or responsibilities
assigned to Employee, (ii) a breach in any material respect by
Employee of a term or provision of this Agreement which is not
cured within 14 days after notice of such breach shall have been
give
