Exhibit 10.1
Lakeland Industries, Inc.
Employment Agreement
This agreement
(“Agreement”) has been entered into this 11th day
April, 2008, by and between Lakeland Industries, Inc., a
Delaware corporation (“Company”), and Christopher
J. Ryan, an individual
(“Executive”).
IT
IS AGREED AS FOLLOWS
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SECTION
1:
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DEFINITIONS
AND CONSTRUCTION.
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1.1
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DEFINITIONS. For
purposes of this Agreement, the following words and phrases,
whether or not capitalized, shall have the meanings specified
below, unless the context plainly requires a different
meaning.
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1.1
(a)
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“CHANGE
IN CONTROL” means:
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(i)
The acquisition by any individual, entity or group, or a Person
(within the meaning of Section 13 (d) (3) or 14 (d) (2) of the
Exchange Act) of ownership of more than 50% of either (a) the then
outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (b) the combined
voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors
(the “Outstanding Company Voting Securities”);
or
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(ii)
Individuals who, as the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, as a member of the Incumbent Board, any such individual
whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board; or
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(iii)
Approval by the stockholders of the Company of a reorganization,
merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, (a) more than 50% of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as
their
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ownership,
immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (b)
no Person beneficially owns, directly or indirectly, 30% or
more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization,
merger or consolidation or the combined voting power of the
then outstanding voting securities of such corporation,
entitled to vote generally in the election of directors and
(c) at least a majority of the members of the board of
directors of the corporation resulting from such
reorganization, merger or consolidation were members of the
Incumbent Board at the time of the execution of the initial
agreement providing for such reorganization, merger or
consolidation; or
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(iv)
Approval by the stockholders of the Company of (a) a complete
liquidation or dissolution of the Company or (b) the sale or other
disposition of all or substantially all of the assets of the
Company, other than to a corporation, with respect to which
following such sale or other disposition, (1) more than 50% of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately
prior to such sales or other disposition, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as
the case may be, (2) no Person beneficially owns, directly or
indirectly, 30% or more of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (3) at
least a majority of the members of the board of directors of such
corporation were members of the Incumbent Board at the time of the
execution of the initial agreement or action of the Board providing
for such sale or other disposition of assets of the
Company.
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1.1
(b)
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“EMPLOYMENT
PERIOD” means the period beginning on April 11, 2008 and
ending on April 11, 2010.
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1.1
(c) “PERSON”
has the meaning set forth in Sections 13 (d) and 14 (d) of the
Exchange Act.
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1.1
(d)
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“TERM”
means the period that begins on April 11, 2008 and ends on the
earlier of: (i) the Date of Termination as defined in Section 3.6
of this Agreement, or (ii) the close of business on April 11,
2010.
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1.1
(e)
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“TRIGGERING
TRANSACTION” means a Change of Control of the
Company.
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1.1
(f)
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“TRIGGERING
TRANSACTION DATE” shall mean the date of the Triggering
Transaction.
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1.2
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APPLICABLE
LAW. This Agreement shall be governed by and construed
in
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accordance
with the laws of the State of New York without reference to
its conflict of law principles.
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SECTION
2:
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TERMS
AND CONDITIONS OF EMPLOYMENT.
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2.1
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PERIOD
OF EMPLOYMENT. The Executive shall remain in the employ
of the Company throughout the Term of this Agreement in accordance
with the terms and provisions of this Agreement.
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2.2
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POSITIONS
AND DUTIES.
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2.2
(a)
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Throughout
the Term of this Agreement, the Executive shall serve as a Director
of the Board and President, General Counsel and Secretary of the
Company, subject to reasonable directions and nominations of the
Board. The Executive shall have such authority and shall
perform such duties as are specified by the By-laws of the Company
for the office to which he has been appointed hereunder and shall
so serve, subject to the control exercised by the Board from time
to time. Additionally, each year throughout the Term of
the Executive’s service as a Director, the Executive shall be
nominated to serve as member of the Board.
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2.2
(b)
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Throughout
the Term of this Agreement (but excluding any periods of vacation
and sick leave to which the Executive is entitled), the Executive
shall devote his full business time and attention to the business
and affairs of the Company and shall use his best efforts to
perform faithfully and efficiently such responsibilities as are
assigned to him under or in accordance with this Agreement;
provided that, it shall not be a violation of this paragraph for
the Executive to serve on corporate, civic or charitable boards or
committees, so long as such activities do not interfere with the
performance of the Executive’s responsibilities as an
employee of the Company in accordance with this Agreement or
violate the Company’s conflict of interest
policy.
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2.3
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SITUS
OF EMPLOYMENT. Throughout the Term of this Agreement,
the Executive’s services shall be performed at the location
where the Executive was employed immediately prior to the Effective
Date, or any office of the Company which is located on Long Island
or the New York City metropolitan area. It is understood
and agreed by the Executive that the Executive will be required at
the discretion of the Board of Directors, to engage in substantial
business travel.
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2.4
(a)
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ANNUAL
BASE SALARY. The Executive shall receive an annual
salary (“Annual Base Salary”) of $400,000 between April
11, 2008 and April 11, 2010, which shall be paid in equal or
substantially equal semi-monthly installments (i.e. $16,666.67
semi-monthly). During the Term of this Agreement, the
Annual Base Salary payable to the Executive shall be reviewed at
least annually and may be increased at the sole discretion of the
Compensation Committee of the Board but shall not be
reduced.
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2.4(b)
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INCENTIVE
BONUSES. In addition to Annual Base Salary, the
Executive shall be
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awarded
the opportunity to earn an incentive bonus on an annual basis
(“Incentive Bonus”) under an incentive
compensation plan to be determined by the Compensation
Committee of the Board (and attached hereto as Exhibit
1). During the Term of this Agreement, the annual
Incentive Bonus which the Executive will have the opportunity
to earn shall be reviewed at least annually and be increased
at the discretion of the Compensation Committee of the
Board.
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2.4
(c)
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INCENTIVE,
SAVINGS AND RETIREMENT PLANS. Throughout the Term of
this Agreement, the Executive shall be entitled to participate in
all incentive, savings and retirement plans generally available to
other peer executives of the Company.
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2.4
(d)
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WELFARE
BENEFIT PLANS. Throughout the Term of this Agreement
(and thereafter, subject to Section 4.1 (c) hereof), the Executive
and /or the Executive’s family, as the case may be, shall be
eligible for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs provided by
the Company (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and programs)
to the extent generally available to other peer executives of the
Company. As it affects Sections 2.4(c) and 2.4(d) above,
the Company shall always have the right to alter its benefit plan
providers.
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2.4
(e)
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EXPENSES. Throughout
the Term of this Agreement, the Executive shall be entitled to
receive reimbursement for all reasonable and necessary
business-related expenses incurred by the Executive in accordance
with the policies, practices and procedures generally applicable to
other peer executives of the Company. The Executive
agrees to submit receipts and/or vouchers in support of all
requests for reimbursement.
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2.4
(f)
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FRINGE
BENEFITS. Throughout the Term of this Agreement, the
Executive shall be entitled to use a non-luxury automobile, with
title to remain in the Company, and life insurance in the face
amount of $500,000, paid by the Company. Executive
agrees to be solely responsible for any and all federal, state and
local taxes owing as a result of such automobile or life insurance
being provided.
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2.4
(g)
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VACATION. Throughout
the Term of this Agreement, the Executive shall be entitled to paid
vacation for 20 business days. It is understood that no
more than two (2) consecutive weeks of vacation shall be taken by
Executive at any one time.
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SECTION
3:
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TERMINATION
OF EMPLOYMENT
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3.1
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DEATH. Your
employment shall terminate on the date of your
death. Your Base Salary (as in effect on the date of
death) shall continue through the last day of the month in which
your death occurs, the payment of which shall be made to your
estate or your beneficiary as designated in writing to the
Company. Your estate or designated beneficiaries as
applicable shall also receive a pro-rata portion of the Incentive
Bonus, if any, determined for the fiscal year up to and including
the date of death which shall be determined in good faith by the
Compensation Committee of the Board of Directors. Your
beneficiaries shall also be entitled to all other benefits
generally paid by the
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Company
on an employee’s death.
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3.2.
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DISABILITY. Your
employment shall terminate if you become totally disabled. You
shall be deemed to be totally disabled if you are unable, for any
reason, to perform any of your duties to the Company for a period
of ninety consecutive days, or for periods aggregating 120 days in
any period of 180 consecutive days.
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3.3
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TERMINATION
FOR CAUSE. The Company may terminate the
Executive’s employment during the Employment Period for
“Cause”, which shall mean termination based upon: (i)
the Executive’s failure to substantially perform his duties
with the Company (other than as a result of a disability, which
shall be governed by Section 3.2), after a written demand for
substantial performance is delivered to the Executive by the
Company, which specifically identifies the manner in which the
Executive has not substantially performed his duties, (ii) the
Executive’s commission of an act of fraud, theft,
misappropriation, dishonesty or embezzlement, (iii) the
Executive’s conviction for a felony or pleading nolo contendere to a
felony, (iv) the Executive’s failure to follow a lawful
directive of the Board of Directors, or (v) the Executive’s
material breach of any provision of this
Agreement. Notwithstanding the foregoing, the Executive
shall not be deemed to have been terminated for Cause unless and
until (i) he receives a Notice of Termination from the Company,
(ii) he is given the opportunity, with counsel, to be heard before
the Board, and (iii) the Board finds, in its good faith opinion,
the Executive was guilty of the conduct set forth in the Notice of
Termination.
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3.4
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GOOD
REASON. The Executive may terminate his employment with
the Company for “Good Reason”, which shall
mean:
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3.4
(a)
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the
assignment to the Executive of any duties inconsistent in any
respect with the Executive’s position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2.2 (a) or any other
action by the Company which results in a material diminution in
such position, authority, duties or responsibilities, excluding for
this purpose any action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof
given by the Executive;
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3.4
(b)
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(i)
in the event of and after the occurrence of a Triggering
Transaction, the failure by the Company to continue in effect any
benefit or compensation plan, stock ownership plan, life insurance
plan, health and
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