Sample Business Contracts
Employment Agreement - Polo Ralph Lauren Corp. and Jackwyn Nemerov
Employment Forms
- Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
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- Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
- Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
- Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
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POLO RALPH LAUREN CORPORATION
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the Agreement), is made effective as of the 9th day of September, 2004 (the Effective Date), by and between POLO RALPH LAUREN CORPORATION, a Delaware corporation (the Corporation), and Jackwyn Nemerov (the Executive).
In consideration of the mutual covenants and premises contained herein, the parties hereby agree as follows:
ARTICLE I
EMPLOYMENT
1.1 Employment Term. The Corporation hereby agrees to employ the Executive, and the Executive hereby agrees to serve the Corporation, on the terms and conditions set forth herein. The employment of the Executive by the Corporation shall be effective as of the Effective Date hereof and continue until the close of business of the fifth anniversary of the Effective Date of this Agreement (the Term), unless earlier terminated in accordance with Article II hereof.
1.2 Position and Duties. During the Term the Executive shall faithfully, and in conformity with the directions of the Board of Directors of the Corporation (the Board) or the management of the Corporation (Management), perform the duties of her employment, and shall devote to the performance of such duties her full time and attention. During the Term the Executive shall serve in the position of Executive Vice President. During the Term, the Executive may engage in outside activities provided those activities do not conflict with the duties and responsibilities enumerated hereunder, and provided further that the Executive gives written notice to the Board of any outside business activity that may require significant expenditure of the Executives time in which the Executive plans to become involved, whether or not such activity is pursued for profit. The Executive shall be excused from performing any services hereunder during periods of temporary incapacity and during vacations in accordance with the Corporations disability and vacation policies.
1.3 Place of Performance. The Executive shall be employed at the principal offices of the Corporation located in New York, New York, except for required travel on the Corporations business.
1.4 Compensation and Related Matters.
(a) Base Compensation. In consideration of her services during the Term, the Corporation shall pay the Executive cash compensation at an annual rate not less than the base salary as set forth on Exhibit A hereto (Base Compensation). Executives Base Compensation shall be subject to such increases as may be approved by the Board or Management. The Base Compensation shall be payable as current salary, in installments not less frequently than monthly, and at the same rate for any fraction of a month unexpired at the end of the Term.
(b) Bonus. During the Term, the Executive shall have the opportunity to earn an annual bonus in accordance with any annual bonus program the Corporation maintains that would be applicable to the Executive as reflected in Executives Terms of Employment Sheet.
(c) Stock. During the Term, the Executive shall be eligible to participate in the Polo Ralph Lauren Long-Term Stock Incentive Plan (the Incentive Plan) Stock grants are granted annually in June of each year and are subject to ratification by the Compensation Committee of the Board of Directors. In accordance with the terms of the Incentive Plan and subject to approval by the Compensation Committee of the Board of Directors, Executive will be granted such options and restricted shares of stock as are specified in Executives Terms of Employment Sheet, to be awarded at the end of the fiscal quarter in which Executives hire date occurs. Stock options will vest one third each year from the date of the grant and will be fully vested after
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three years, subject to Executives continued employment through each vesting date. Restricted shares of stock will vest one-fifth each year from the date of the grant and will be fully vested after five years, subject to Executives continued employment through each vesting date.
(d) Car Allowance. During the Term, the Corporation shall reimburse Executive for the cost of a car and driver.
(e) Expenses. During the Term, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in performing services hereunder, including all reasonable expenses of travel and living while away from home, provided that such expenses are incurred and accounted for in accordance with the policies and procedures established by the Corporation.
(f) Vacations. During the Term, the Executive shall be entitled to the number of vacation days in each calendar year, and to compensation in respect of earned but unused vacation days, determined in accordance with the Corporations vacation program. The Executive shall also be entitled to all paid holidays given by the Corporation to its employees.
(g) Other Benefits. The Executive shall be entitled to participate in all of the Corporations employee benefit plans and programs in effect during the Term as would by their terms be applicable to the Executive, including, without limitation, any pension and retirement plan, supplemental pension and retirement plan, deferred compensation plan, incentive plan, stock option plan, life insurance plan, medical insurance plan, dental care plan, accidental death and disability plan, and vacation, sick leave or personal leave program. After the Executive becomes employed, the Corporation shall not make any changes in such plans or programs that would adversely affect the Executives benefits thereunder, unless such change occurs pursuant to a program applicable to other similarly situated employees of the Corporation and does not result in a proportionately greater reduction in the rights or benefits of the Executive as compared with other similarly situated employees of the Corporation. Except as otherwise specifically provided herein, nothing paid to the Executive under any plan or program presently in effect or made available in the future shall be in lieu of the Base Compensation or any bonus payable under Sections 1.4(a) and 1.4(b) hereof.
ARTICLE II
TERMINATION OF EMPLOYMENT
2.1 Termination of Employment. The Executives employment may terminate prior to the expiration of the Term under the following circumstances:
(a) Without Cause. The Executives employment shall terminate upon the Corporation notifying the Executive that her services will no longer be required. | |
(b) Death. The Executives employment shall terminate upon the Executives death. | |
(c) Disability. If, as a result of the Executives incapacity due to physical or mental illness, the Executive shall have been absent and unable to perform the duties hereunder on a full-time basis for an entire period of six consecutive months, the Executives employment may be terminated by the Corporation following such six-month period. | |
(d) Cause. The Corporation may terminate the Executives employment for Cause. For purposes hereof, Cause shall mean: (1) the willful and continued failure by the Executive to substantially perform her duties hereunder after demand for substantial performance is delivered to her by the Corporation that specifically identifies the manner in which the Corporation believes the Executive has not substantially performed her duties, (2) Executives conviction of, or plea of nolo contendere to, a crime (whether or not involving the Corporation) constituting any felony or (3) the willful engaging by the Executive in gross misconduct relating to the Executives employment that is materially injurious to the Corporation, monetarily or otherwise (including, but not limited to, conduct that constitutes competitive activity, in violation of Article III) or which subjects, or if generally known would subject, the Corporation to public ridicule. For purposes of this paragraph, no act, or failure to act, on the |
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Executives part shall be considered willful unless done, or omitted to be done, by her not in good faith and without reasonable belief that her action or omission was in the best interest of the Corporation. Notwithstanding the foregoing, the Executives employment may be terminated for Cause only by act of the Board of Directors of the Corporation and, in any event, the Executives employment shall not be deemed to have been terminated for Cause without (x) reasonable written notice to the Executive setting forth the reasons for the Corporations intention to terminate for Cause, (y) the opportunity to cure (if curable) within 30 days of such written notice of the event(s) giving rise to such notice and (z) an opportunity for the Executive, together with her counsel, to be heard by the Board of Directors of the Corporation. | |
(e) Voluntary Termination. The Executive may voluntarily terminate the Executives employment with the Corporation at any time, with or without Good Reason. For purposes of this Agreement, Good Reason shall mean (A) a material diminution in or adverse alteration to Executives title, base salary, benefits, position, status, or duties, (B) the relocation of the Executives principal office outside the area which comprises a fifty (50) mile radius from New York City, (C) a failure of the Corporation to comply with any material provision of this Agreement or (D) the Corporation requires Executive to report to anyone other than Ralph Lauren or Roger Farah, provided that the events described in clauses, (A), (B), and (C) above shall not constitute Good Reason unless and until such diminution, change, reduction or failure (as applicable) has not been cured within thirty (30) days after notice of such noncompliance has been given by the Executive to the Corporation. |
2.2 Date of Termination. The date of termination shall be:
(a) if the Executives employment is terminated by the Executives death, the date of the Executives death; | |
(b) if the Executives employment is terminated by reason of Executives Disability or by the Corporation pursuant to Sections 2.1(a) or 2.1(d), the date specified by the Corporation; and | |
(c) if the Executives employment is terminated by the Executive, the date on which the Executive notifies the Corporation of her termination. |
2.3 Effect of Termination of Employment.
(a) If the Executives employment is terminated by the Corporation, pursuant to Section 2.1(a), or if the Executive resigns for Good Reason pursuant to Section 2.1(e), the Executive shall only be entitled to the following:
(i) Severance. Subject to Section 4.1(a) hereof, the Corporation shall: (a) continue to pay the Executive, in accordance with the Corporations normal payroll practice, her Base Compensation, as in effect immediately prior to such termination of employment, for the longer of the balance of the Term or the one-year period commencing on the date of such termination (whichever period is applicable shall be referred to herein as the Severance Period); and (b) pay to the Executive, on the last business day of the Severance Period, an amount equal to the bonus paid to the Executive for the calendar year prior to the year in which her employment is terminated. Notwithstanding the foregoing, in order to receive any severance benefits under this Section 2.3(a)(i), the Executive must sign and not timely revoke a release and waiver of claims in favor of the Corporation, its successors, affiliates, and assigns. | |
(ii) Stock Options. The Executives rights with respect to any stock options granted to the Executive by the Corporation shall be governed by the provisions of the Corporations stock option plan and respective award agreements, if any, except as provided in Section 4.1(a). | |
(iii) Welfare Plan Coverages. The Executive shall continue to participate during the Severance Period in any group medical, dental or life insurance plan she participated in prior to the date of her termination, under substantially similar terms and conditions as an active employee (i.e., the Corporation will continue to pay the Corporations portion of the costs of such participation); provided that participation in such group medical, dental and life insurance plan shall correspondingly cease at such |
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time as the Executive becomes eligible for a future employers medical, dental and/or life insurance coverage (or would become eligible if the Executive did not waive coverage). | |
(iv) Retirement Plans. Without limiting the generality of the foregoing, it is specifically provided that the Executive shall not accrue additional benefits under any pension plan of the Corporation (whether or not qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended) during the Severance Period. |
(b) If the Executives employment is terminated by reason of the Executives death or Disability, pursuant to Sections 2.1(b) and 2.1(c), the Executive (or the Executives designee or estate) shall only be entitled to whatever welfare plans benefits are available to the Executive pursuant to the welfare plans the Executive participated in prior to such termination, and whatever stock options may have been granted to the Executive by the Corporation the terms of which shall be governed by the provisions of the respective award agreements under which such stock options were granted.
(c) If the Executives employment is terminated by the Corporation for Cause or by the Executive not for Good Reason pursuant to Section 2.1(e) hereof, the Executive shall receive only that portion of the Executives then current Base Compensation payable through the Executives termination date. The Executives rights with respect to any stock options granted to the Executive by the Corporation shall be governed by the provisions of the respective award agreements under which such stock options were granted. The Corporation shall have no further obligations to the Executive as a result of the termination of the Executives employment.
ARTICLE III
COVENANTS OF THE EXECUTIVE
3.1 Non-Compete.
(a) The Corporation and the Executive acknowledge that: (i) the Corporation has a special interest in and derives significant benefit from the unique skills and experience of the Executive; (ii) the Executive will use and have access to proprietary and valuable Confidential Information (as defined in Section 3.2 hereof) during the course of the Executives employment; and (iii) the agreements and covenants contained herein are essential to protect the business and goodwill of the Corporation or any of its subsidiaries, affiliates or licensees. Accordingly, except as hereinafter noted, the Executive covenants and agrees that for a period of one year following the termination of Executives employment (except as provided in 3.1(b)), the Executive shall not provide any labor, work, services or assistance (whether as an officer, director, employee, partner, agent, owner, independent contractor, stockholder or otherwise) to a Competing Business. For purposes hereof, Competing Business shall mean any business engaged in the designing, marketing or distribution of premium lifestyle products, including but not limited to apparel, home, accessories and fragrance products, which competes in any material respects with the Corporation or any of its subsidiaries, affiliates or licensees, and shall include, without limitation, those brands and companies that the Corporation and the Executive have jointly designated in writing on the date hereof, which is incorporated herein by reference and which is attached as Exhibit B, as being in competition with the Corporation as of the date hereof. Thus, Executive specifically acknowledges that Executive understands that, except as provided in Section 3.1(b) she may not become employed by any Competing Business in any capacity during the Term, provided that the Executive may own, solely as an investment, securities of any entity which are traded on a national securities exchange if the Executive is not a controlling person of, or a member of a group that controls such entity and does not, directly or indirectly, own 2% or more of any class of securities of such entity.
(b) The non-compete provisions of this Section shall no longer be applicable to Executive if she has been notified pursuant to Section 2.1(a) hereof that her services will no longer be required during the Term or if the Executive has terminated her employment for Good Reason pursuant to Section 2.1(e).
(c) It is acknowledged by the Executive that the Corporation has determined to relieve the Executive from any obligation of non-competition for periods after the Term, and/or if the Corporation terminates the
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Executives employment under Section 2.1(a) or if the Executive has terminated her employment for Good Reason pursuant to Section 2.1(e). In consideration of that, and in consideration of all of the compensation provisions in this Agreement (including the potential for the award of stock options that may be made to the Executive), Executive agrees to the provisions of Section 3.1 and also agrees that the non-competition obligations imposed herein, are fair and reasonable under all the circumstances.