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EXHIBIT 10.4
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This Amended and Restated
Employment Agreement (the "Agreement") is entered into and shall be
effective as of August 15, 2005, by and among FGX
International Inc., a Delaware corporation with a mailing address
of 500 George Washington Highway, Smithfield, Rhode Island 02917
(the "Company"), Brian J. Lagarto, an individual with a residence
address of 16 Barberry Hill Road, Cumberland, RI 02864
("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 in September 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, the
Executive shall serve as the Chief Financial Officer of FGX
International Holdings Limited, a British Virgin Islands
corporation and the indirect parent of the Company ("FGX
Holdings"), and each of its subsidiaries 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 FGX Holdings and each of
its subsidiaries diligently, competently and in a good faith
manner. Notwithstanding anything to the contrary set forth herein,
the Executive shall be permitted during the Employment Period to
(a) engage in civic and charitable activities to the extent
they are not inconsistent with Executive’s duties hereunder
and (b) serve as a member of the board of directors of not
more than two additional for profit corporations.
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 Two Hundred Fifty Thousand Dollars ($250,000) per
annum (as from time to time, if at all, increased, the "Salary").
The Salary may be increased (but not decreased) from time to time
during the Employment Period. The Salary shall, at a minimum, be
reviewed by the Board of Directors of the Company (the "Board") on
August 1 st of each
year during the Employment Period (the "Anniversary Date"), and
shall be increased by no less than six percent (6%) on
August 1, 2006 and August 1, 2007, and on each August 1
occurring thereafter by no less than 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) Two
Hundred Fifty Thousand Dollars ($250,000) 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 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 no less than thirty-five percent (35%) of his Salary and up to a
maximum of fifty percent (50%) of his Salary under the
Company’s Executive Incentive Compensation Plan ("Annual
Target Bonus Amount") on account of the services rendered by him
during each calendar year during the Employment Period and the
attainment of certain performance goals and successful completion
of certain initiatives established by the Company, and the amount
of any such bonus shall be payable from time to time during the
Employment Period in the sole discretion of the Board.
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.
Paid Time Off . Executive shall be entitled to twenty
(20) days of paid time off annually in accordance with the
Company’s paid time off policies in effect from time to time,
to be taken at such time(s) as shall not, in the reasonable
judgment of the President of the Company, interfere with
Executive’s fulfillment of his duties hereunder. Executive
shall be entitled to as many holidays, sick days and personal days
as are generally provided by the Company from time to time to its
employees in accordance with the Company’s policies as in
effect from time to 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.
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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 condition 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.
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 this Agreement.
6. Termination by
Executive; Termination by the Company Without Cause .
a.
Notice/Events :
i.
Termination by Executive . Executive may terminate his
employment at any time by providing written notice to the
Company.
ii.
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.
b.
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):
i.
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 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;
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ii.
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;
iii.
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 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;
iv.
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
v.
any material breach, which remains uncured for twenty
(20) days after reasonable notice, by the Company of any
provisions of this Agreement.
c.
Severance .
i.
Without Cause . If the Company terminates Executive’s
employment without Cause, or if Executive terminates his employment
pursuant to Section 6(b) 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 one
(1) year after the date of termination or, if the Company
exercises its Non-compete Extension (as defined below), eighteen
(18) months (x) 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; (y) 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 (assuming for purposes of calculating such amount
that the percentage of Salary payable as a bonus to Executive on
account of the year of termination will be the same percentage of
Salary paid as a bonus to Executive on account of the immediately
preceding year); and (z) 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 one 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.
ii.
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
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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.
iii.
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.
iv.
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" 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
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