Lakeland Industries, Inc.
EXHIBIT 10.7
Employment Agreement
This agreement ("Agreement") has been entered into this ___ day
_____________, 2006, by and between Lakeland Industries, Inc., a
Delaware
corporation ("Company"), and Christopher J. Ryan, an individual
("Executive").
IT IS AGREED AS FOLLOWS
SECTION 1:
DEFINITIONS AND CONSTRUCTION.
1.1
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.
1.1 (a)
"CHANGE IN CONTROL" means:
(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
(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
(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
(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.
1.1 (b) "EMPLOYMENT PERIOD" means the period beginning on
February 1, 2006 and ending on April 30, 2008.
1.1 (c)
"PERSON" has the meaning set forth in Sections 13 (d) and 14 (d)
of
the Exchange Act.
1.1 (d)
"TERM" means the period that begins on February 1, 2006 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
30,
2008.
1.1 (e)
"TRIGGERING TRANSACTION" means a Change of Control of the
Company.
1.1 (f)
"TRIGGERING TRANSACTION DATE" shall mean the date of the
Triggering
Transaction.
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1.2
APPLICABLE LAW. This Agreement shall be governed by and construed
in
accordance with the laws of the State of New York without
reference
to its conflict of law principles.
SECTION 2: TERMS AND
CONDITIONS OF EMPLOYMENT.
2.1
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.
2.2
POSITIONS AND DUTIES.
2.2(a) 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.
2.2(b) 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.
2.3
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 locatedon 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.
2.4
COMPENSATION.
2.4(a) ANNUAL BASE
SALARY. The Executive shall receive an annual salary
("Annual Base Salary") of $400,000 between February 1, 2006 and
April
30, 2008, 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) INCENTIVE
BONUSES. In addition to Annual Base Salary, the Executive
shall be awarded the opportunity to earn an incentive bonus on
an
annual basis ("Incentive Bonus") under an incentive
compensation
planto be determined by the Compensation Committee of the
Board.
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.
2.4(c) 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.
2.4(d) 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.
2.4(e) 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.
2.4(f) 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.
2.4(g) 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.
SECTION 3:
TERMINATION OF EMPLOYMENT
3.1
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.
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Your beneficiaries shall also be entitled to all other benefits
generally paid by the Company on an employee's death.
3.2.
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.
3.3
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 ofa
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.
3.4
GOOD REASON. The Executive may terminate his employment with
the
Company for "Good Reason", which shall mean:
3.4(a) 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 Com
