|
EXHHIBIT 10.6
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This Amended and Restated
Employment Agreement (the "Agreement") is entered into as of the 10
th day of April,
2006, by and among FGX International Inc., a Delaware corporation
with a mailing address of 500 George Washington Highway,
Smithfield, Rhode Island 02917 (the "Company"), John H. Flynn, Jr.,
an individual with a residence address of 52 Second Street,
Newport, Rhode Island 02840 ("Executive"), and, solely with respect
to Section 13 of this Agreement, AAi.FosterGrant, Inc., a
Rhode Island corporation ("FosterGrant").
INTRODUCTION
FosterGrant and Executive are
parties to a certain Employment Agreement dated April 10,
2002, as amended on October 1, 2003 and September 30,
2004 (the "Original Agreement"). The Company, Executive and
FosterGrant desire to amend and restate the Original Agreement to
modify certain of the terms and conditions set forth therein.
AGREEMENT
In consideration of the premises
and mutual promises herein below set forth, the parties hereby
agree as follows:
1. Employment Period
. The term of Executive’s Employment by the Company pursuant
to this Agreement (the "Employment Period") shall commence on the
date hereof (the "Effective Date") and shall continue until
terminated as provided herein. For purposes of this Agreement,
"Termination Date" means the date on which the Employment Period
ends.
2. Employment; Duties
. Subject to the terms and conditions set forth herein, Executive
shall serve as President of FGX International Holdings Limited, a
British Virgin Islands corporation and the indirect parent of the
Company ("FGX Holdings"), and each of its subsidiaries (together
with FGX Holdings, the "FGX Group") during the Employment Period.
The duties assigned and authority granted to Executive shall be as
set forth in the By-laws of the Company and as determined by the
Chief Executive Officer from time to time. Executive agrees to
perform his duties for the FGX Group diligently, competently, and
in a good faith manner. Executive may also engage in civic and
charitable activities to the extent they are not inconsistent with
Executive’s duties hereunder.
3. Salary and Bonus
.
(a)
Base Salary . Executive shall be entitled to receive a base
salary from the Company during the Employment Period at the rate of
no less than Three Hundred Seventy Thousand and 00/100 Dollars
($370,000) per annum (as from time to time, if at all increased,
the "Salary"). Executive’s Salary shall not be decreased, and
after the first twelve (12) months shall be increased on each
anniversary date of this Agreement (the "Anniversary Date"), based
upon the increase in the Consumer Price Index for all Urban
Consumers (CPI-U), Boston, Massachusetts, published by the Bureau
of Labor Statistics of the United States Department of Labor
(1982-1984=100) (the "Index"). If, on an Anniversary Date, the
Index shows an increase from the base date of January, 2005 (the
"Base Date"), then Executive’s Salary for the ensuing
12 months shall be the product of (a) Three Hundred
Seventy Thousand Dollars ($370,000) and
(b) one plus a percentage equal to the percentage increase
in the Index on each such Anniversary date over the Index on the
Base Date. In the event the Bureau of Labor Statistics no longer
publishes the Index the Company shall use that index then available
which most closely replicates the Index. In addition, the Board of
Directors of the Company may further increase Executive’s
Salary from time to time in their discretion, based upon the
Company’s performance and Executive’s particular
contributions.
(b)
Bonus . Executive shall be eligible for an annual cash bonus
of up to fifty percent (50%) of his Salary under the
Company’s Executive Incentive Compensation Plan ("Annual
Target Bonus Amount") during the Employment Period, subject to the
discretion of the Company’s Board of Directors.
4. Other Benefits
.
(a)
Insurance and Other Benefits . During the Employment Period
Executive shall be entitled to participate in, and shall receive
the maximum benefits available under, the Company’s insurance
programs (including health, supplemental health and life insurance)
and any ERISA benefit plans, as the same may be adopted and/or
amended from time to time, and shall receive all other benefits
that are provided by the Company to other senior executives. The
Company shall purchase a disability insurance policy, in which the
maximum monthly benefit payable pursuant to such policy, based upon
Executive’s monthly Salary, shall become payable after a
six-month period of disability. The Company shall contribute the
maximum amount permitted under current law and under the terms of
the applicable plan for Executive’s account under the
Company’s qualified and non-qualified 401(k) Plan,
Supplemental 401(k) Plan, and any other Company pension or
retirement plan as in effect from time to time during the
Employment Period. Notwithstanding the foregoing, Executive shall
be entitled to life insurance in the amount of, at a minimum, two
times Salary, up to an aggregate benefit of $400,000.
(b)
Vacation . Executive shall be entitled to five
(5) weeks paid vacation annually, to be taken at such time(s)
as shall not, in the reasonable judgment of the Company’s
Board of Directors, interfere with the Executive’s
fulfillment of his duties hereunder and otherwise in accordance
with the Company’s policies and procedures in effect from
time to time, including the Company’s policies and procedures
with respect to the payment for or carryover of accrued and unused
vacation time.
(c)
Automobile Allowance . During the Employment Period the
Company shall provide Executive with a monthly automobile allowance
consistent with the plan adopted or to be adopted by the Company
for other senior executives but in all events the monthly
automobile allowance shall be no less than that in existence as of
the Effective Date.
(d)
Stock Options . Executive acknowledges that he has been
granted stock options to purchase ordinary shares of FGX Holdings
on the terms and subject to the conditions set forth in that
certain Time-Based Incentive Stock Option Agreement dated
September 29, 2004, which agreement shall remain in full force
and effect and unchanged hereby.
2
5. Termination by the
Company With Cause . Upon prior written notice to Executive,
the Company may terminate Executive’s employment if any of
the following events shall occur (any of the following events shall
constitute "Cause" for all purposes hereof):
(a) the
conviction of Executive for a crime involving fraud or moral
turpitude;
(b) deliberate
dishonesty of Executive with respect to the Company or any of its
subsidiaries; or
(c) the
refusal of Executive to follow the reasonable and lawful written
instructions of the Chief Executive Officer of the Company with
respect to the services to be rendered and the manner of rendering
such services by Executive, provided such refusal is material and
repetitive and is not justified or excused either by the terms of
this Agreement or by actions taken by the Company in violation of
thus Agreement.
6. Termination by
Executive; Termination by the Company Without Cause .
6.1
Notice/Events .
(a)
Termination by Executive . Executive may terminate his
employment at any time by providing written notice to the
Company.
(b)
Termination by the Company Without Cause . The Company may
terminate Executive’s employment at any time, without Cause
by providing written notice to Executive. As used in this
Agreement, the term "without Cause" shall mean termination for any
reason not specified in Section 5 or Section 7 hereof.
6.2
Executive’s Right-to-Terminate . Executive may
terminate Executive’s employment for Good Reason at any time
during the term of this Agreement. For purposes of this Agreement,
"Good Reason" shall mean any of the following (without
Executive’s express written consent):
(a) the
assignment to Executive by the Company of any duties materially
inconsistent with Executive’s status with the Company or a
material alteration in the nature or status of Executive’s
responsibilities from those in effect on the date hereof, or a
material reduction in Executive’s titles or offices as in
effect on the date hereof, or any removal of Executive from, or any
failure to reelect Executive to, any of such positions, except in
connection with the termination of his employment for disability or
for any reason specified in Section 5 hereof or as a result of
Executive’s death or by Executive other than for Good
Reason;
(b) a
reduction by the Company in Executive’s Salary as in effect
on the date hereof or as the same may be increased from time to
time during the term of this Agreement;
(c)
except if such action applies to all senior executive officers of
the Company generally, any failure by the Company to continue in
effect its present Executive Incentive Compensation Plan, any
fringe benefits, the taking of any action by the Company which
would, directly or indirectly, materially reduce Executive’s
benefits or deprive Executive
3
of any fringe benefits enjoyed by Executive at the date hereof,
or the failure by the Company to provide Executive with the number
of paid vacation days to which Executive is entitled at the date
hereof;
(d) a
relocation of the Company’s principal executive offices to a
location more than 50 miles from their current location in, or the
Company’s requiring Executive to be based anywhere other than
the Company’s principal executive offices; or
(e) any
material breach, which remains uncured for twenty (20) days
after reasonable notice, by the Company of any provisions of this
Agreement.
6.3
Severance .
(a)
Without Cause . If the Company terminates Executive’s
employment without Cause, or if Executive terminates his employment
pursuant to Section 6.2 hereof, then, subject to
Section 8, commencing on the date of termination of
employment, the Company shall provide Executive with a severance
package which shall consist of the following: (i) for a period
equal to two (2) years after the date of termination
(i) payment on the first business day of each month of an
amount equal to one-twelfth of Executive’s then current
Salary under Section 3(a) hereof; (ii) payment on the first
business day of each month of an amount equal to one-twelfth of
Executive’s Annual Target Bonus Amount under the
Company’s Executive Incentive Compensation Plan for the year
of termination; and (iii) continuation of all benefits under
Section 4 (a) hereof; provided, however , that the
amount of any severance payments hereunder shall be reduced by the
amount of income otherwise earned by Executive during the two year
period following termination and provided, further that
benefits under Section 4(a) shall be discontinued as of the date on
which Executive is provided comparable benefits from any other
source.
(b)
General Release . As a condition precedent to receiving any
severance payment, Executive shall execute a general release of any
and all claims which Executive or his heirs, executors, agents or
assigns might have against the Company, its subsidiaries,
affiliates, successors, assigns and its past, present and future
employees, officers, directors, agents and attorneys, except for
claims arising under this Agreement or any employee benefit plan
(other than any employee benefit plan providing a benefit in the
nature of a severance benefit) in which Executive participates or
for any right to indemnification to which Executive may be entitled
as an officer and director of the Company.
(c)
Withholding . All payments made by the Company under this
Agreement shall be net of any tax or other amounts required to be
withheld by the Employer under applicable law.
(d)
Certain Reductions of Payments by the Company .
(1)
Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by
the Company to or for the benefit of the Executive, whether paid or
payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise (a "Payment"), would constitute an
"excess parachute payment"
4
within the meaning of Section 280G(b) of the U.S. Internal
Revenue Code (the "Code"), and thus would result in the Executive
incurring an excise tax under Section 4999 of the Code, then
the aggregate present value of amounts payable or distributable to
or for the benefit of the Executive pursuant to this Agreement
(such payments or distributions pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced
to the Reduced Amount, but only if and to the extent that the
after-tax value to the Executive of reduced Agreement Payments
would exceed the after-tax value to the Executive of the Agreement
Payments received by the Executive without application of such
reduction. The "Reduced Amount" shall be an amount expressed in
present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be nondeductible
by the Company because of Section 280G of the Code. Anything
to the contrary notwithstanding, if the Reduced Amount is zero and
it is determined further that any Payment which is not an Agreement
Payment would nevertheless be nondeductible by the Company for
Federal income tax purposes because of Section 280G of the
Code, then the aggregate present value of Payments’ which are
not Agreement Payments shall also be reduced (but not below zero)
to an amount expressed in present value which maximizes the
aggregate present value of Payments without causing any Payment to
be nondeductible by the Company because of Section 280G of the
Code. For purposes of this Section 6(c)(iv), present value
shall be determined in accordance with Section 280G(d)(4) of the
Code. Thus, for illustrative purposes only, if the
Executive’s average W-2 compensation for the five
(5) years prior to the year in which a Change in Control
occurs (the "Base Amount") was $500,000, and the value of the
payments and benefits that are contingent upon the Change in
Control (the "Parachute Pay
| 
