Exhibit 10.5
EMPLOYMENT AGREEMENT
This Employment Agreement (this
“Agreement”) is entered into as of the 29
th day
of August, 2007, by and between Steinway, Inc., a Delaware
corporation d/b/a Steinway & Sons (the
“Company”) , and Ronald Losby (the
“Executive”) .
WHEREAS , the
Executive is currently employed by the U.K. branch of Steinway
& Sons, a subsidiary of Steinway Musical Instruments, Inc.
(“SMI”) and an affiliate of the Company, and
WHEREAS , SMI
wishes to transfer the Executive to the Company and expand his
responsibilities.
NOW THEREFORE , in
consideration of the mutual covenants contained herein, and other
good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
1.
Term of Employment .
The Company agrees to employ the Executive and the Executive hereby
agrees to accept employment, commencing January 1, 2008 (the
“ Commencement Date” ), and continuing until
December 31, 2010, unless otherwise terminated in accordance with
the terms set forth in paragraph 7 of this Agreement
(including any extensions, the “Term” ).
2.
Duties and Responsibilities .
a.
The Executive shall be employed as the President of the Company,
and shall perform such duties as are from time to time assigned to
him by the Board of Directors of the Company (the “
Board” ) and that are ordinarily and customarily
performed by a person holding such position, and shall include
primary responsibility for all business matters of SMI’s
piano operations in the Americas. The Executive shall report
to the President of Steinway & Sons.
b.
During the period of his employment hereunder, the Executive agrees
to devote his entire business time, attention, energies and his
best efforts to the performance of his duties.
3.
Compensation .
a.
For all services to be performed by the Executive during the Term,
the Company shall pay to him, together with other compensation as
hereinafter provided, an annual salary of $375,000 (subject to such
deductions and withholdings as may be required by law or by further
agreement with the Executive), beginning on the Commencement
Date.
b.
Without limiting and in addition to the foregoing, each year the
Executive shall be eligible to receive an annual bonus in
accordance with the IPS Plan. For 2008, the bonus amount
shall not be less than the average bonus payment earned by
the Executive
under Steinway &
Sons’ IPS Plan for the three years ended December 31,
2007. For 2009 and thereafter, the bonus shall be as
determined in accordance with the IPS Plan.
c.
The Executive shall be eligible to receive annual salary increases,
based on his performance of his duties, but any such increases
shall be in the sole and absolute discretion of the Board.
4.
Benefits . In addition to any other items of
compensation provided for in this Agreement, the Executive shall be
entitled to the following benefits (the
“Benefits” ):
a.
The Executive shall be entitled to participate in any retirement
(including the Company’s Supplemental Executive Retirement
Plan), life insurance, health, medical, disability or other plans
or benefits, whether insured or self-insured, which the Company in
its sole and absolute discretion may make available generally from
time to time to its executives. The Company shall also reimburse
the Executive for all medical expenses incurred which are not
otherwise covered by an existing benefit plan and shall pay the
premium for additional life insurance up to the maximum coverage
available under the Company’s policy.
b.
The Executive shall be entitled to vacation in
accordance with the Company’s current vacation policy during
each year of this Agreement.
c.
The Executive shall be entitled to the use of the Company’s
apartment through June 30, 2008.
d.
The Executive shall receive a weekly housing allowance of $500.
5.
Reimbursement of Expenses .
a.
The Executive shall be entitled to be reimbursed for all reasonable
travel and entertainment expenses that are (i) incurred by him in
the performance of his duties hereunder and (ii) evidenced by
appropriate documentation.
b.
In addition, the Company shall reimburse the Executive for the
following expenses incurred in connection with his relocation to
New York: (i) commissions and other fees incurred in selling
current home up to a maximum of £50,000, (ii) the pre-payment
penalty on his current mortgage up to a maximum of £10,000,
(iii) tax return preparation fees for the next three years and (iv)
closing costs of acquiring a new home in the U.S., provided,
however, that the reimbursement for points on a new mortgage shall
be limited to 1% of the loan amount.
6.
Restrictive Covenants . The Executive acknowledges
that certain of the Company’s products and services are
proprietary in nature and have been manufactured, assembled and
marketed through the use of customer lists, supplier lists, trade
secrets, methods of operation and other confidential information
possessed by the Company and disclosed in confidence to the
Executive (the “Trade Secrets” ), which may not
be easily accessible to other persons in the trade. The
Executive also acknowledges that he will have substantial and
ongoing contact with the Company’s customers and suppliers
and will thereby gain knowledge of customer needs and references,
sources of equity funding, sources of supply, methods of assembly
and other valuable information necessary for the success of the
Company’s business. Therefore, except as provided in
subparagraphs (a) and (d) below, and except as provided in
paragraph 8 , during the time the Executive is employed
under the provisions of this Agreement
and until the date of
the second anniversary of the termination of the executive’s
employment, the Executive shall not, without the prior written
consent of the Company:
a.
During the Term, engage in any business activity that competes with
the Company in the manufacturing of musical instruments o
