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EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into as of the 3rd
day of
July, 2007 between Cache, Inc., a Florida corporation, having
its principal
place of business at 1460 Broadway, New York, New York 10036
("CACHE" or the
"COMPANY") and Robert Kantor, an individual residing at 66
Leonard Street, Apt.
3 E, New York, NY 10013 ("EXECUTIVE").
BACKGROUND
The Company, Adrienne Victoria, Inc., a wholly owned subsidiary
of the
Company (the "PURCHASER"), Adrienne Kantor, Robert Kantor and
Adrienne Victoria
Designs, Inc. (the "SELLER") have simultaneously entered into
that certain Asset
Purchase Agreement, dated July 3, 2007 (the "ASSET PURCHASE
AGREEMENT").
As a material inducement for the Executive to cause the Seller
and the
Company to cause the Purchaser to enter into the Asset Purchase
Agreement, the
Company has agreed to hire the Executive and the Executive has
agreed to work
for the Company pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
covenants
contained herein and intending to be legally bound hereby,
Company and Executive
agree as follows:
1.0 EMPLOYMENT
Cache hereby employs Executive as its Executive Vice
President,
Manufacturing and Product Development with the duties and
responsibilities set
forth in Section 2.0 and Executive hereby accepts such
employment. This
Agreement shall commence on July 3, 2007 for a term of
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5 years, expiring on July 2, 2012 (the "INITIAL TERM"), subject
to earlier
termination as hereinafter provided, provided that the Company
and the Executive
may, subject to Executive's consent, extend the term of this
Agreement for
additional 12 month periods (each an "EXTENSION TERM") by
providing written
notice to Executive no later than 90 days prior to the
expiration of Initial
Term or any Extension Term, as applicable. The terms of any
Extension Term shall
be negotiated in good faith by the parties.
2.0 DUTIES AND RESPONSIBILITIES
2.1 The Principal duty of Executive shall be to direct, and
manage
manufacturing and product development operations of the Company.
Executive shall
report to the Chief Executive Officer ("CEO") of the Company.
Subject to the
direction and control of the CEO and in accordance with the
policies and
procedures of the Company, Executive shall be responsible for
manufacturing and
product development for the Company and management of its
manufacturing and
product development department, including responsibility for
hiring and firing
of employees reporting to him. As an Executive Vice President,
the Executive
shall also be a member of the executive management team of the
Company in which
capacity he shall participate in determining the business
strategy, marketing
strategy and financial direction of the Company.
2.2 Executive agrees that he will diligently devote his entire
business
skill, time and effort to the performance of his duties on
behalf of Cache.
Executive agrees that he will not, alone or as a member of a
partnership or as
an officer, director, shareholder, employee or agent of any
other person, firm
or business organization, engage in any other business
activities or pursuits
requiring his personal services that might conflict with his
duties hereunder.
Executive may also serve as a director or consultant to other
companies, which
are not competitive with the
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Company, upon receiving prior approval of the Board of Directors
(the "Board").
Executive may continue to engage in charitable and civil
activities without
compensation.
2.3 Executive represents and warrants that he is not subject or
party to
any employment agreement, non-competition covenant,
non-disclosure agreement or
other agreement, covenant, understanding or restriction that
would prohibit
Executive from executing this Agreement and performing fully his
duties and
responsibilities hereunder, or which would in any manner,
directly or
indirectly, limit or affect the duties and responsibilities
which may now or in
the future be assigned to Executive by Cache.
2.4 Executive agrees that at all times he will strictly adhere
to and
perform all his duties in accordance with written policies and
procedures of
Cache applicable to all executive employees that are in effect
from time to
time.
3.0 COMPENSATION AND BENEFITS
3.1 SALARY. During the Initial Term and each Extension Term of
Executive's
employment under this Agreement, Cache shall pay Executive an
annual base salary
of $150,000, or at such higher rate as the Company shall
determine ("BASE
SALARY") less withholdings and other applicable payroll
deductions as required
by law, payable at such times as Cache customarily pays its
other executive
officers (but in no event less often than monthly).
3.2 BENEFITS. Executive will be entitled to participate in all
of the
Company's employee benefit plans and other executive benefit
plans or programs
that Cache offers, provides or makes available from time to time
to its senior
executive officers or employees of similar rank and title as
Executive,
including, without limitation, any life insurance, health and
accident, stock
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option, restricted stock or other stock based compensation plans
or programs,
and at levels commensurate with his rank and title, provided
that Executive
meets the eligibility requirements for such plans or programs.
To the extent
permitted by applicable law and the terms of such plans and
programs, Executive
shall be credited for years of service rendered to Seller for
purposes of any
vesting requirements under such plans or programs, other than
the 401(k). Cache
shall reimburse Executive in an amount of up to $500 per month
as allowance of
his motor vehicle use.
3.3 BUSINESS EXPENSES. Executive shall be promptly reimbursed
for the
business expenses reasonably incurred on Cache's behalf in
connection with the
performance of his services hereunder upon presentation of an
itemized account
and written proof of such expenses, in accordance with the
policies established
by Cache.
3.4 VACATION. Executive shall be entitled to four weeks of paid
vacation
leave per year. Such vacation shall be taken at such times and
in such intervals
as Executive deems appropriate in compliance with vacation
notice policy of the
Company.
3.5 DIRECTORS AND OFFICERS LIABILITY INSURANCE. The Company
currently
maintains directors and officers liability insurance policy
coverage as
heretofore described to Executive. Executive shall be covered
under such
insurance as from time to time modified by the Company for
actions taken by
Executive as an officer of Cache.
3.6 COVERAGE. Nothing in this Agreement shall prevent Executive
from
participating in any other compensation plan or benefit plan
made available to
him by the Company.
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4.0 TERMINATION WITHOUT COMPENSATION
4.1 MUTUAL AGREEMENT. Executive's employment, and the parties'
respective
obligations hereunder may be terminated by mutual written
agreement.
4.2 RESIGNATION WITHOUT GOOD REASON. Executive may terminate his
employment
without Good Reason (as hereafter defined), by written
resignation submitted to
Cache at least forty-five (45) days prior to a specified
termination date and
thereafter Cache shall not have any further liability or
obligation to
Executive, his executors, administrators, heirs, assigns or any
other person
claiming under or through him, except for unpaid salary and
benefits through,
and unreimbursed reimbursable expenses incurred prior to, such
termination date,
except as otherwise set forth in the Asset Purchase Agreement.
Cache may at its
sole discretion, terminate Executive's services at any time
during that period,
and compensate Executive for the remainder of that period.
4.3 PARTIAL/TOTAL DISABILITY. If Executive is unable to perform
his duties
and responsibilities to the full extent required hereunder,
either with or
without reasonable accommodation, by reason of physical or
psychiatric illness,
injury or incapacity, as determined in good faith by the Board,
for six (6)
continuous months or nine (9) months in any twelve (12) month
period, Cache may
terminate Executive's employment by written notice of the
termination date, and
Cache shall have no further liability or obligation to Executive
hereunder,
except for any unpaid salary and benefits accrued to the date of
termination and
except as may be set forth in the Asset Purchase Agreement.
During any period of
disability, Executive will receive his Base Salary in effect at
the time of
disability, reduced by the amount of any disability benefits
under any
applicable Cache disability program, other Cache benefit plan or
federal or
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state disability benefit program, plus reimbursement of business
expenses and
any other benefits to which Executive is entitled pursuant to
the terms of this
Agreement or Cache policies. In the event of any dispute under
this Section 4.3,
Executive shall submit to a physical and/or psychiatric
examination by a
licensed physician mutually satisfactory to Cache and Executive.
The cost of
such examination will be paid by Cache and the findings of such
physician shall
be determinative.
4.4 DEATH. If Executive dies, this Agreement shall terminate and
thereafter
Cache shall not have any further liability or obligation to
Executive, his
executors, administrators, heirs, assigns or any other person
claiming under or
through him, except for unpaid Base Salary, unreimbursed
business expenses and
other benefits accrued to the date of his death and except as
may be otherwise
set forth in the Asset Purchase Agreement.
4.5 CAUSE. Cache may terminate Executive's employment for
"Cause" at any
time upon written notice to Executive and upon such termination
Cache shall have
no further liability or obligation to Executive except for any
unpaid salary and
benefits accrued to the date of termination. For purposes of
this Agreement,
"CAUSE" shall mean any of the following: (a) Executive's
commission of any
felony (including, without limitation, any violation of the
Foreign Corrupt
Practices Act), whether or not job related (but excluding
traffic violations),
which in the reasonable judgment of the Board results in a
material injury to
the Company or its reputation; (b) Executive's failure (other
than by reason of
death, disability, illness, injury or incapacity) to perform or
fulfill any of
Executive's material duties or responsibilities or reasonable
lawful directives
of the Company which failure, in the reasonable judgment of the
Board, results
in a material injury to the Company or its reputation after
written demand for
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performance, fulfillment or cure of such failure is delivered by
the Company
specifically identifying the manner in which the Company
believes that Executive
has so failed, PROVIDED that if such failure is capable of cure
and Executive is
actively taking reasonable action to cure such failure, such
failure shall not
constitute "Cause" hereunder so long as such actions continue;
(c) Executive's
habitual insobriety or substance abuse; (d) intentional
misappropriation of
Company funds by Executive; (e) conduct in the performance of
Executive's
employment which violates applicable law or causes the Company
to violate
applicable law, including without limitation any harassment
or
anti-discrimination regulations, and which failure in the
reasonable judgment of
the Board results in a material injury to the Company or its
reputation; (f) any
material violation of Section 6, 7 or 9 of this Agreement, or
(g) during any
calendar year beginning in with the 2009 calendar year Cache's
annualized Gross
Margin (as defined in the Purchase Agreement) drops by more than
2-1/2
percentage points below the Gross Margin for the trailing 12
months ending June
30, 2007, PROVIDED that any reduction in Gross Margin
attributable to acts of
God, war, hostilities, acts of terrorism, increases in prices
for raw materials,
governmental action such as embargoes and other events in the
nature of force
majeure which, in any such case, are outside the ordinary course
of business,
shall be excluded in computing the drop in Gross Margin.
4.6 In the event that Executive's employment is terminated for
any of the
reasons set forth in this Section 4, Cache will have no further
liability or
obligation to Executive, except for any unpaid Base Salary,
unreimbursed
expenses or other benefits accrued as of the date of termination
and except as
may otherwise be set forth in the Asset Purchase Agreement.
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5.0 TERMINATION WITH COMPENSATION
5.1 Cache shall have the right to terminate Executive's
employment at any
time without Cause by giving Executive thirty (30) days' prior
written notice of
the termination date. Executive shall have the right to
terminate his employment
for Good Reason by giving Cache thirty (30) days' prior written
notice. "GOOD
REASON" shall mean the Company's Material Breach (as hereinafter
defined) of
this Agreement or a Change in Ownership or Control (as
hereinafter defined) of
the Company. The Company's "MATERIAL BREACH" of this Agreement
shall mean (i)
the failure of the Company to pay Base Salary or additional
compensation or
benefits hereunder in accordance with this Agreement or the
failure to make
payments due under the Asset Purchase Agreement, in each case
within 10 business
days after written notice of such failure is given by the
Executive, (ii) the
assignment to Executive without Executive's prior written
consent of duties
substantially inconsistent with his duties and responsibilities
as set forth in
Section 2.0 of this Agreement or a material diminution of such
duties and
responsibilities without his consent, or (iii) the relocation of
Executive's
principal place of employment to a geographic location outside
of the greater
New York City area without his prior written consent. A "CHANGE
IN OWNERSHIP OR
CONTROL" of the Company shall mean the occurrence of one or more
of the
following four events: (i) any person becomes a beneficial owner
(as such term
is defined in Rule 13d-3 promulgated under the Securities
Exchange Act of 1934,
as amended) directly or indirectly of securities representing
more than 50% of
the total number of votes that may be cast for the election of
directors of
Cache; (ii) within two years after a merger, consolidation,
liquidation or sale
of assets involving Cache, or a contested election of a Cache
director, or any
combination of the foregoing, the individuals who were directors
of Cache
immediately prior thereto shall cease to
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constitute a majority of the Board; (iii) within two years after
a tender offer
or exchange offer for voting securities of Cache, the
individuals who were
directors of Cache immediately prior thereto shall cease to
constitute a
majority of the Board; (iv) a sale of all or substantially all
the assets of
Cache to an unrelated third party, or (v) at least two of Brian
Woolf, Thomas
Reinckens and Margaret Feeney cease to be senior executive
officers of Cache. In
addition, should the Company terminate Executive's employment
for Cause and
Cause is determined, by arbitration in accordance with the
provisions set forth
in ANNEX B hereto, not to exist, such termination shall be
deemed to constitute
a resignation by Executive for Good Reason.
In the event that Executive's employment is terminated pursuant
to this
Section 5.1, Cache shall continue to pay Executive the Base
Salary then in
effect for the balance of the term of this Agr
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