December 1, 2002 EXHIBIT 10(r)
Mr. James M. McCormick
414 Sunrise Ave.
Sayville, NY 11782
Dear Mr. McCormick:
The purpose of this letter is to confirm your continuing employment with
Lakeland Industries Inc. on the following terms and conditions:
1. THE PARTIES
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This is an agreement between James M. McCormick residing at 414 Sunrise Ave.,
Sayville, NY 11782 (hereinafter referred to as "you") and Lakeland Industries,
Inc., a Delaware corporation, with principal place of business located at 711-2
Koehler Avenue, Ronkonkoma, NY 11779-7410 (hereinafter the Company).
2. TERM
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The term of the agreement shall be for a 1 year period commencing February 1,
2003, which term shall be automatically renewed for a maximum of two (2)
successive annual periods unless either party notifies the other 120 days prior
to the expiration of the original term or renewal thereof, that the agreement
will not be renewed. Termination outside of the contract period by the Company
shall only be for cause, and cause is defined as conviction for a felony or you
were grossly negligent in performing your duties and responsibilities, as
determined by the Board of Directors.
3. CAPACITY
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You shall be employed in the capacity of Vice President and Treasurer of
Lakeland Industries, Inc. and such other titles as may from time to time be
determined by the Board of Directors. You shall be directly responsible to the
Board of Directors of the Company.
4. COMPENSATION
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As full compensation for your services you shall receive following from the
Company:
(a) A base annual salary of $152,000 for fiscal 2004, $170,000 for 1st
successive annual renewal and $190,000 for 2nd successive annual
renewal payable bi-weekly; and
(b) Participation when eligible in any of the Company's Pension, Profit
Sharing Plans, Stock Option and ESOP - 401(K) when any such plans are
presently or become effective; and
(c) Such other benefits as are consistent with the personnel benefits
provided by the Company to its officers and employees; provided
however that your vacation shall be for a period of no less than four
(4) weeks; and
(d) You shall be entitled to a leased automobile or allowance amounting to
$550 monthly; and
(e) Reimbursement for any expenses incurred by you that are necessary and
proper in the conduct of the Company's business; and
(f) An annual bonus as set forth below.
In May of each year commencing in 2004, you shall be awarded an annual
bonus based on the positive current year performance of the Company as compared
to the prior Fiscal Year. The bonus to be awarded in May 2004 and upon the
successive annual renewals, shall be based under an incentive compensation plan
which equals $1,000.00 for each penny of additional after tax earnings
incrementally earned over the prior years fiscal earnings.
The E.P.S. shall be the basic earnings per share of common stock of the
Company as determined by the Company's auditors in the preparation of the annual
audit and reported to the Company's shareholders. If during the fiscal year
commencing February 1, 2003 or thereafter, the Company acquires all of the stock
and/or assets of a separate business entity or divests itself of one or more
subsidiaries or is involved in a recapitalization or other public offering of
the Company's securities, then in that event the amount of the aforesaid annual
bonus will be adjusted to reflect such change or changes. The adjustment to the
annual bonus and any additional discretionary bonus will be made by the
Compensation Committee of the Board of Directors of the Company.
The decision of the Compensation Committee of the Board of Directors as to
any matter relating to the annual bonus or any additional discretionary bonus
shall be final, binding and conclusive and shall not be subject to any further
review.
5. DISABILITY
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In the event that you shall incur a total disability which renders you unable to
substantially perform your duties to the Company as determined by the Board of
Directors you shall receive 100% of your base annual salary for the first year
of such total disability reduced by the amount of any disability insurance
payments received under a disability insurance policy maintained by the Company
or you (Disability Insurance). Thereafter, and for the following six months you
shall receive 50% of your base annual salary during the period of such total
disability reduced by the amount of any such Disability Insurance. If such
disability continues after such 18 month period your employment hereunder shall
terminate.
6. CONFIDENTIALITY
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Except as required in your duties to the Company, you shall not at any time
during your employment and for a period of six months thereafter, directly or
indirectly, use or disclose any confidential information relating to the Company
or its business which is disclosed to you or known by you as a consequence of or
through your employment by the Company. As used in this Agreement, "confidential
information" means any information relating to the business of the Company which
is not publicly known or readily ascertainable by proper means.
7. CHANGE IN CONTROL
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Upon the occurrence of a change in control (as hereinafter defined) you shall
have the right to terminate at your option this agreement within 30 days after
the occurrence of such change in control. Upon the effective date of such
termination you shall be entitled to receive a lump sum severance amount equal
to the sum of (i) the greater of the present value of your base salary in effect
at the time of the change of control for 2 years or the present value of your
base salary in effect at the time of the change of control for the remainder of
the term and (ii) the estimated amount which would have been payable to you
pursuant to the bonus as set forth in this agreement for the fiscal year during
which the change of control occurred as determined in good faith by the
Compensation Committee of the Board of Directors of the Company based upon the
Company's results of operations for the fiscal year through the effective date
of the termination and its historical results of operations and pro-rated to the
effective date of termination. You shall not be required to mitigate the amount
of termination payment provided pursuant to this section nor will such payment
be reduced by reason of your securing other employment.
A change of control shall have occurred (i) upon the acquisition of any person
(as such term is defined in sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934 as amended), directly or indirectly of securities of the
Company representing 66 2/3% or more of the combined voting power of the
Company's then outstanding securities or (ii) upon the future disposition by the
Company (whether direct or indirect by sale of assets or stock merger
consolidation or otherwise) of all or substantially all of the Company's
business and/or assets in the transaction.
In the event of a future disposition by the Company (whether direct or indirect
by sale of assets or stock, merger, consolidation or otherwise) of all or
substantially all of its business and/or assets the Company will require any
successor to expressly assume and agree to perform this agreement in the same
manner and to the same extent that the Company would be required to perform, if
no such disposition had taken place.
8. NOTICES
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Any notices required to be give Under this Agreement shall unless otherwise
agreed to by you and the Company be in writing and by certified mail return
receipt requested and mailed to the Company at its headquarters at 711-2 Koehler
Avenue Ronkonkoma, NY 11779-7410 or to you at your home address at 414 Sunrise
Ave., Sayville, NY 11782.
9. WAIVER OR MODIFICATION
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No waiver or modification in whole or in part of this agreement or any term or
condition hereof shall be effective against any party unless in writing and duly
signed by the party sought to be bound. Any waiver of any breach of any
provision hereof or right or power by any party on one occasion shall not be
construed as a waiver of or a bar to the exercise of such right or power on any
other occasion or as a waiver of any subsequent breach.
10.SEPARABILITY
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Any provision of this agreement which is unenforceable or invalid in any respect
in any jurisdiction shall be ineffective in such jurisdiction to the extent that
it is unenforceable or invalid without effecting the remaining provisions hereof
which shall continue in full force and effect. The unenforceability or
invalidity of any provision of the agreement in one jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
11.HEADINGS
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The headings contained in this agreement are for convenience only and shall not
affect restrict or modify the interpretation this agreement.
12.CONTROLLING LAW
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This agreement shall be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed therein,
and you agree to the exclusive jurisdiction and venue of all State and Federal
Courts sitting in the State of New York in connection with any claim, dispute,
or controversy arising under or in connection with this Agreement.
LAKELAND INDUSTRIES, INC.
/s/ James M. McCormick /s/ John J.Collins
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James M. McCormick By: John J. Collins
Vice President & Treasurer
/s/ Eric O.Hallman
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By: Eric O. Hallman
/s/ W. James Raleigh
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By: W. James Raleigh
Board of Directors
Compensation Committee