1
EXHIBIT 10.28
PRIVATE AND CONFIDENTIAL
Roger Best
Stanner House
Preston Road
Grimsargh
Preston PR2 5JE
11th September 1997
Dear Roger
Re: OFFER OF EMPLOYMENT
I am writing to confirm formally the following terms of employment between you
and Reebok International Limited, ("RIL"). If you accept the terms and
conditions as set out herein, this will form your contract of employment with
RIL.
I. PRIOR AGREEMENTS
This letter is intended to confirm your terms of employment in your new
position, it having been agreed that these terms, when combined with the terms
of your Dutch employment, will not in any circumstance result in your total
compensation and benefits, nor the terms of any severance, being less in net
value than the compensation and benefits provided to you in the letter agreement
between RIL(US) and yourself dated 17th April 1996. That letter agreement will
remain in effect insofar as it deals with stock options and other matters not
specifically dealt with herein. You accept that the pension and insurance
benefits provided hereunder are an equitable substitute for those provided for
in the 12 April 1996 letter. A copy of that agreement is attached hereto and is
incorporated herein by reference.
II. JOB TITLE/GRADE
You have accepted the position of Senior Vice President Marketing Europe in
which capacity you will report to the Managing Director of RIL or such person as
the President of RIL (US) shall so designate.
III. COMPENSATION AND BENEFITS
A. Your base salary will be one hundred and thirty thousand pounds (130,000
pounds sterling) per annum to be paid in twelve equal instalments (or pro rata
where you are employed hereunder during part of a month), into your bank account
by credit transfer.
2
B. Your salary will be reviewed in March of 1998 and each year thereafter.
The decision with regard to reviewing salary will be entirely at RIL's
discretion.
C. You will be responsible for the payment of your own taxes save that in
the event that the vesting or exercise of any share options results in a total
tax liability greater than the tax liability which you would have incurred had
you been solely resident and employed in the UK, RIL will pay to you an amount
equivalent to any additional tax. Further, recognising that the vesting of
previously granted stock options may create an additional Dutch tax liability,
RIL agrees in such event to advance to you in the form of a loan and upon the
receipt of appropriate documentation, an additional sum of money to cover this
incremental tax burden. You will repay this sum of money back to RIL at such
time as the excess Dutch foreign tax credits created by this tax liability are
utilised on your UK return.
D. You will be entitled to participate in RIL's senior management bonus
scheme. The target incentive compensation is agreed to be 50% of your base
salary with the actual amount of the award to be determined in line with the
terms and conditions of the company scheme. Payment of any bonus is dependent
upon your individual performance and the overall financial position of the
company.
IV. PENSION
You will be entitled to a non-contributory pension allowance equivalent
to sixteen percent (16%) of your total base salary and any bonuses earned both
pursuant to this Agreement and that paid to you as a result of your employment
by Reebok Europe BV. The maximum permitted by UK law will be paid tax free into
RIL's Pension Scheme which you are expected to join and any amount above this
limit will be subject to tax and paid into a funded scheme to be mutually
agreed.
V. HOLIDAY ENTITLEMENT
Your annual holiday entitlement will be 25 days per calendar year (or
pro-rata where you are employed hereunder during part of the calendar year). In
addition you will receive normal public and religious holiday entitlement. Any
entitlement to holiday remaining at the end of any calendar year shall lapse
without entitlement to payment in lieu thereof. You will be entitled on the
termination of your employment to pay in respect of any accrued but untaken
holiday on a pro-rata basis. This holiday entitlement is to be taken at the same
time as any holiday entitlement taken pursuant to your role as an employee of
Reebok Europe BV.
VI. MEDICAL AND HEALTH INSURANCE
RIL operates a private medical insurance scheme (currently BUPA), which
you will be invited to join. This provides you and
3
your family with cover at RIL's expense. You will also be provided with critical
illness and disability insurance in line with company policy. For further
details please contact the Human Resources Department.
VII. LIFE INSURANCE
You will receive life insurance cover of three times your combined base
salaries from RIL and Reebok Europe BV.
VIII. TAX ADVICE
It is expected that Ernst and Young will assist you at the Company's
expense in the filing of your UK and Dutch tax returns as well as any US returns
required as a result of your recent US posting. RIL will also reimburse you on a
one time basis for fees incurred in your obtaining your own tax advice at the
outset of this assignment up to a maximum of UK 5,000 pounds sterling.
IX. TERMINATION OF EMPLOYMENT
Should you wish to terminate your employment at any time you will be
expected to give RIL twelve (12) months' written notice to that effect.
Similarly, should RIL wish to terminate your employment, it will give you twelve
(12) months' notice in writing. Under no circumstances except for "justified
cause" may your employment be terminated prior to 31st January 1999, unless RIL
pay you the equivalent of the greater of twelve months' compensation and
allowances or the total compensation and allowances due through 31st January
1999. In the event of your death your employment will cease with immediate
effect.
X. TERMINATION OF EMPLOYMENT FOR JUSTIFIED CAUSE WITHOUT NOTICE
Your employment may be terminated by RIL without notice or payment in
lieu of notice for, amongst other matters, serious or repeated misconduct or
breaches of this Contract, mental or long-term illness or if you are convicted
of a felony or a misdemeanour involving moral turpitude.
XI. CONFIDENTIALITY
You will be aware that RIL operates in a highly competitive industry.
RIL regards all of the information to which you will have access as being of a
confidential nature and you are required to sign the separate Confidentiality
Declaration attached hereto which forms part of your terms and conditions of
employment.
XII. NON-COMPETITION
You further agree that during the period of your employment by RIL and
for a period of one year thereafter you will not (without the Company's written
consent) accept any position with
4
any organization which competes anywhere in the world where Reebok products are
sold, with the Reebok Brands Division or with other businesses of RIL as it
shall be constituted at the time of your termination, whether as officer,
director, employee, agent, consultant, partner, shareholder or otherwise. You
acknowledge and agree that, because the legal remedies of the Company would be
inadequate in the event of your breach of, or other failure to perform, any of
your obligations set forth in this Section, the Company may, in addition to
obtaining any other remedy or relief available to it (including without
limitation damages at law), enforce the provisions of this Section by injunction
and other equitable remedies. You further acknowledge and agree that the options
granted to you by RIL (US) are granted in part to ensure your compliance with
the non-compete restrictions provided herein, and you thus agree that if you
violate the provisions of this clause that any such options held by you at such
time shall automatically terminate and be cancelled, and to the extent that you
have exercised any such options, you will transfer and deliver to the Company
any profits made by you as a result of such exercise and sale. You agree that
the provisions with respect to the duration, geographic, and product scope of
the restrictions set forth in this Section are reasonable to protect the
legitimate interests of the Company and the good will of the Company.
XIII. START DATE
Your employment by RIL commenced on 7th July 1997.
XIV. GOVERNING LAW AND JURISDICTION
A. This contract shall be governed by and construed in
accordance with the Laws of England.
B. You agree with RIL to submit to the exclusive jurisdiction of the
English courts as regards any claim, dispute or matter arising out of or
relating to this contract.
XV. ACCEPTANCE
I would be grateful if you would confirm your acceptance of this offer
by signing the acceptance copy of this letter and the Confidentiality
Declaration and return these to me as soon as possible. (Copies are enclosed for
you to retain.)
Yours sincerely
/s/ M L STEPHENS
M L Stephens
Company Secretary
5
I have read and understand the offer of employment, and confirm my acceptance of
the same.
Signed /s/ ROGER BEST Date 18/9/97
Name: Roger Best
6
ROGER BEST
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this 11th day of September, 1997, by and between Roger
Best, residing at Stanner House, Preston Road, Grimsargh, Preston PR2 5JE,
(hereinafter BEST), and Reebok Europe BV, a Dutch corporation, with its
registered office at Moret Ernst & Young, Marten Meesweg 51, 306a AV Rotterdam,
The Netherlands (hereinafter REEBOK).
WITNESSETH
WHEREAS REEBOK wishes to employ BEST as its Managing Director; and
WHEREAS REEBOK is a wholly owned subsidiary of Reebok International Ltd (US)
(hereinafter RIL); and
WHEREAS BEST has agreed to accept the position of Managing Director and as a
statutory Director of REEBOK; and
WHEREAS the shareholders of REEBOK will appoint BEST as Director ("bestuurder")
of REEBOK with effect from this date;
NOW THEREFORE, in consideration of the mutual covenants and obligations
contained herein, and intending to be legally bound, the parties, subject to the
terms and conditions set forth herein, agree as follows:
1. EMPLOYMENT
BEST, subject to the rights of termination contained herein, has been
employed as from 7th July 1997 in the position of Managing Director of REEBOK
and such employment will continue for an indefinite period. BEST will report to
RIL's Senior Vice President International or such person as the President of RIL
may from time to time direct.
2. DUTIES
During the term of his employment BEST shall devote his time, skill and
efforts to the performance of his duties which shall include, without
limitation, the duties as are customarily performed by the Managing Director of
such companies. In his capacity as Managing Director of REEBOK he shall have
such power and authority as shall reasonably be required to enable him to
perform his duties hereunder in an efficient manner; provided that in exercising
such power and authority and performing such duties, he shall at all times be
subject to the authority and control of the President of RIL and shall at all
times adhere to the financial controls and other policies of RIL. BEST shall
have the power as Managing Director to bind REEBOK and act solely in its behalf
in accordance with the law and the Articles of
7
Association of REEBOK.
3. COMPENSATION
REEBOK shall pay BEST, and BEST hereby agrees to accept, as compensation
for all services rendered hereunder, the gross yearly sum of one hundred and
thirty thousand pounds sterling (130,000 pounds sterling) as base salary.
Included in the gross annual base salary is an eight per cent (8%) holiday
allowance and full compensation for any overtime worked by BEST. This
compensation shall be paid in arrears in equal monthly installments. This
compensation will be reviewed annually thereafter. It is REEBOK's intention that
thirty five per cent (35%) of this shall be paid to BEST as a tax free
allowance, subject to the approval of the Dutch tax authorities.
4. PERFORMANCE BONUS
BEST will be entitled to participate in RIL's International Bonus Scheme.
BEST's target bonus rate shall be fifty per cent (50%) of his base salary.
5. HOLIDAY ENTITLEMENT
BEST shall be entitled to 25 days paid holiday per annum, excluding public
holidays. The exact dates of such holiday must be agreed by BEST's immediate
superior. This holiday shall be taken at the same time as holiday entitlement
from Reebok International Limited.
6. EXPENSES
REEBOK shall pay or reimburse BEST for all reasonable travel and other
expenses incurred by him in connection with the performance of his services
under this Agreement.(1) Payment shall be made upon presentation of expense
statements or vouchers and such other supporting information as REEBOK may from
time to time request.
- -----------
(1) It has been agreed that REEBOK will reimburse BEST for his accommodation
expenses in the Netherlands as well as a weekly return flight to the United
Kingdom.
7. OWNERSHIP OF WORK
All concepts and ideas, drawings, patents, patent applications and other
product development programs and campaigns developed by BEST in the performance
of this Agreement shall be the sole and exclusive property of REEBOK, and, upon
its request at any time, or from time to time, during the term of or after the
termination of his employment, BEST shall deliver to REEBOK all drawings,
sketches and other material and records relating
8
to such concepts, ideas, programs and campaigns that may be in his possession or
otherwise available to him.
8. CONFIDENTIALITY
Both during the term of his employment by REEBOK and thereafter, BEST
shall not, without the prior written consent of REEBOK, divulge to any third
party or use for his own benefit, or for any purpose other than the exclusive
benefit of REEBOK, any confidential information concerning its business affairs
obtained by him during the term of his employment, including, but not limited
to, information relating to advertising and marketing campaigns and to REEBOK's
relationship with actual or potential clients or customers and the needs and
requirements of any such actual or potential customers; it being the intent
hereof that he shall not so divulge or use any such information which is
unpublished or not readily available to the general public; provided that
nothing provided herein shall restrict his ability to make such disclosures
during the course of his office as may be necessary or appropriate to the
effective or efficient discharge of his duties to REEBOK.
9. NON-COMPETITION
BEST agrees that for a period of one (1) year following termination of his
employment with REEBOK, BEST will not engage in or have interest in, either
directly or indirectly, any of the companies listed below, whether as a
principal, partner, director, officer, employee, consultant, agent, distributor,
security holder or otherwise (except ownership of one percent (1%) or less of
the equity securities of any publicly traded company):
Adidas, Asaki, Asics, Bata, British knights, Brooks, Champion, Converse,
Diadora, Dunlop, Ellesse, Etonic, Fila, Footjoy, Head, Hi-Tec, Hyde, Kappa,
Kangaroo, K-Swiss, LA Gear, Le Coq Sportif, Lotto, Mitre, Mizuno, New Balance,
Nike, Pentland, Prince, Puma, Ryka, Saucony, Sergio Tacchini, Spalding,
Timberland, Tretorn or Umbro.
BEST further agrees that for a period of two (2) years following
termination of his employment with REEBOK, BEST will not directly or indirectly:
(a) solicit the employment of any person employed by REEBOK, RIL, Reebok
International Limited or any of their subsidiaries, affiliates, joint ventures,
distributors, etc. as of the date of such termination, or attempt to persuade
any such person to leave the employment of those entities, or (b) solicit a
contractual relationship with any third party currently under contract with RIL
as a distributor, joint venture partner, licensee or footwear supplier or
attempt to persuade any such party to terminate its relationship with RIL or
REEBOK.
10. CESSATION OF DUTIES
9
Without prejudice to BEST's right to salary and other benefits under this
Agreement, REEBOK may at any time require BEST not to attend the premises of
REEBOK and not to perform his duties under this Agreement for all or any part of
the notice period set out in Paragraph 12 below, or in the event that REEBOK
decides to request rescission of the employment agreement until a court has
rendered its decision to this request, without prejudice to the right of REEBOK
to suspend BEST.
11. SEVERANCE PAY
If REEBOK terminates this Agreement (other than for "justified cause")
prior to 31st January 1999, as a result of notice being given by REEBOK or
rescission requested by REEBOK, BEST shall be entitled to compensation equal to
the greater of his full salary and allowances through 31st January 1999 or
twelve (12) months' gross base salary and allowances as described in Paragraph 3
above. If Reebok terminates this Agreement (other than for "justified cause")
after 31st January 1999, then BEST shall be entitled in lieu of the notice
provided for in Paragraph 12 below, to the equivalent of twelve months gross
salary and allowances. This agreement shall be deemed terminated by REEBOK if it
is rescinded by a Court following a request from REEBOK as provided in article
7A: 1639w NCI. The compensation shall only be due if the termination is not due
to a "justified cause."
The parties hereto agree that the dismissal of BEST shall not be obviously
unreasonable if the above compensation is paid to BEST and that the compensation
is regarded as being appropriate for the purposes of a proceeding as described
in article 7A: 1639w NCI.
12. NOTICE/TERMINATION
Subject to the laws of the Netherlands regarding employees and directors,
BEST and REEBOK may terminate this Agreement by mutual consent at any time, or
unilaterally by providing to the other party twelve (12) months' notice in
writing. In the case of justified cause, REEBOK may terminate this Agreement
with immediate effect. Should BEST be incapacitated or otherwise unable to
fulfill his duties as Managing Director, then REEBOK may, at its discretion,
terminate this Agreement by notice in writing, after such period as required by
Dutch law. In the event of BEST's death, this Agreement shall terminate with
immediate effect. In the event of "justified cause" REEBOK may terminate this
Agreement with immediate effect and without compensation. "Justified cause"
shall mean amongst other things serious or repeated misconduct or breaches of
this Agreement or if you are convicted of a felony or misdemeanor involving
moral turpitude.
13. SUCCESSORS AND ASSIGNEES
10
This Agreement shall not be assignable by BEST and shall enure to the
benefit of and be binding upon him and REEBOK, its successors and assignees.
14. WAIVER
The waiver of the breach of any term or provision of this Agreement shall
not operate as or be construed to be a waiver of any other or subsequent breach
of this Agreement.
15. GOVERNING LAW AND JURISDICTION
This Agreement shall be construed and enforced in accordance with the laws
of the Netherlands. The parties have agreed that the courts of the Netherlands
shall have exclusive jurisdiction over any claims arising hereunder.
/s/ M L STEPHENS /s/ ROGER BEST
By: M L Stephens By: Roger Best
Director
Reebok Europe BV