Exhibit 10.1
[North Atlantic Trading Company logo]
THOMAS F. HELMS, JR.
Chairman of the Board & Chief Executive Officer
March 10, 2005
Mr. Brian Harriss
35 Maher Avenue
Greenwich, CT 06830
RE: OFFER OF EMPLOYMENT
Dear Brian:
I am pleased to offer you employment with North Atlantic Trading Company, Inc.
and North Atlantic Holding Company, Inc. as Senior Vice President and Chief
Financial Officer. In this position and at this time, you will report to the
Chairman and Chief Executive Officer (both companies and their respective
affiliates being referred to collectively as the "Company" or "NATC"). This
position will have the responsibilities typical of a Chief Financial Officer,
including Finance, Treasury and Accounting functions. This position will require
significant travel, primarily to our Louisville facilities. Additional
responsibilities may be added to your portfolio of reports at the request of the
CEO, from time to time, under this same agreement.
In accordance with our discussions, I have outlined below the principal terms
and conditions of your employment. This letter, when signed by you, will
represent your Employment Agreement:
Commencement Date: April 4, 2005 (assuming 2004 Form 10-K has been
signed and filed by then)
Base Salary: $315,000 per annum
Bonuses: You will be a participant in the Company's
Management Bonus Program under which you will be
eligible for a bonus of up to 50% of your then
current annual base salary.
Bonuses for any year are paid after the completion
of the year-end audit for such year and upon the
recommendation of the CEO, at his discretion, and
after approval by NATC's Board of Directors.
In general, you must remain an employee through
the payment date to be entitled to receive a
bonus.
Stock Options: You will be granted options, subject to Board
approval, to purchase 10,000 shares of NATC's
common stock at an exercise price of not more than
$62 per share and upon substantially similar terms
and conditions to NATC's 2002 Share Incentive
Plan. To satisfy this condition, a new stock
option pool will be required. I am recommending
such action to the Board of Directors. Your stock
options will vest as follows:
DATE STOCK OPTIONS
---- -------------
April 4, 2006 2,500
April 4, 2007 2,500
April 4, 2008 2,500
April 4, 2009 2,500
The options will vest earlier upon a change of
majority ownership of the Company, as will be
described in the Plan.
Vacation: Four (4) weeks of paid vacation, subject to the
Company's policy regarding vacations. Vacation
days do not transfer from one year to the next and
no compensation is paid for unused vacation.
Severance: After you have been employed by the Company for
six months, if your employment is terminated by
the Company without "cause," you will be paid an
amount equal to your then current annual salary
over 12 months in accord with the Company's
regular payroll cycle. In such event, you will
also receive any management bonus you earned and
were awarded for the prior year's employment.
Further, in such event (i) you will retain any
vested stock options, but will forfeit all
unvested stock options and (ii) for a period of up
to twelve months, the Company will continue to pay
certain group health benefits for you. All
"additional benefits" described in this letter
will expire upon termination of employment for any
reason.
To continue to receive severance, you will be
required to demonstrate reasonable efforts to
search for other employment. Further, if you
obtain other employment, your severance payments
will be reduced by the amount of your new salary,
and, if your new employment offers health
insurance, the Company's group health payment for
your benefit will cease.
Termination for "cause" shall mean (i) a felony
conviction of you (as determined by a court of
competent jurisdiction, not subject to further
appeal), (ii) the commission by you of an act of
fraud or embezzlement against the Company, (iii)
gross misconduct which is demonstrably willful and
deliberate on your part and which is materially
detrimental to the Company, (iv) any material
breach by you of any agreement with the Company
not cured within 10 days after written notice
thereof or any material violation of any policies
or procedures of the Company, or (v)
insubordination consisting of your continued
failure to take specific action which is within
your individual control and consistent with your
status as a senior executive of the Company and
your duties and responsibilities after being
provided not less than 10 days' written notice.
Automobile: NATC will provide you with a car allowance of $500
per month, representing the full and total
reimbursement. This amount will be "grossed up" in
your year end tax reporting.
Additional benefits: You will be eligible to join the company's group
benefit plans under each plan's terms and
conditions, such as the Company's Medical and
Dental plans (for which you will be eligible 31
days after commencement of employment). Attached
is a description of the benefit package.
Covenant Not to
Compete And
Confidentiality: You agree that you will not compete with the
Company or its affiliates for a period of one year
if you leave the Company, whether voluntarily or
involuntarily. You also agree not to disparage the
Company, its employees, officers and directors or
its business. Further, while an officer of the
Company, and after any termination of your
employment, you will observe the strict
confidentiality of the information concerning the
Company, its business, and its employees, officers
and directors, and only use such information to
further the Company's interests. "Compete," as
used in this section means, directly or
indirectly: soliciting employees; inducing
employees to terminate their employment;
influencing any suppliers of goods or services or
customers to reduce or cancel any business it does
with the Company or its affiliates; or engaging in
any business that the Company or its affiliates is
engaged in or planned to be engaged in at the time
of termination.
As a condition of employment, a physical examination will be required and must
be successfully completed. Human resources will contact you regarding this
process. Also, you must provide evidence of a valid driver's license.
You have informed us that you are not subject to a confidentiality or
non-compete agreement with any prior employer other than with Hanover Direct,
Inc. Also, as a condition of employment, your references must give adequate
assurance of your ability and character, as determined by us in our discretion.
As you know, Brian, this process has been successfully completed.
Please also note that the terms and conditions of your employment outlined above
are subject to (i) the execution and delivery of this Letter Agreement, (ii) in
the case of bonuses, vacation and other benefits, the applicable plans or
policies of the Company and (iii) in the case of your stock option grant, the
authorization of the Board of Directors of such grant (including the creation of
a new options pool) and your becoming bound by the Exchange and Stockholders'
Agreement applicable to all employee holders of North Atlantic Holding Company
Inc. common stock. This Agreement is governed by New York law.
Under separate cover, we will be sending you a confidentiality agreement
concerning Company information we will be forwarding to you prior to the
commencement of your employment.
I trust that this letter adequately outlines our offer and our discussion.
However, if you have any questions or issues, please do not hesitate to call me.
We are pleased to offer you this opportunity and look forward to a long and
mutually rewarding relationship.
Sincerely,
/s/ Thomas F. Helms, Jr.
Thomas F. Helms, Jr.
Chairman and Chief Executive Officer
Attachments
cc: Messrs.:
J. Africk
M. Cooper
J. Dobbins
G. Gorman
J. O'Donnell
D. Rosefsky
ACCEPTED AND AGREED:
/s/ Brian Harriss
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Brian Harriss
04/10/2005
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Date