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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 28th
day of March, 2001, between Enesco Group, Inc., a Massachusetts corporation
("Employer"), and Daniel DalleMolle ("Employee").
WITNESSETH:
WHEREAS, Employee and Employer desire to enter into this
Agreement pertaining to the terms of the employment of the Employee by Employer;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties agree as follows:
1. Employment. Employer hereby agrees to employ Employee, and
Employee hereby accepts such employment by Employer, upon the terms and
conditions herein set forth. Employee shall serve as President and Chief
Executive Officer of Employer. Although it is contemplated that Employee will
undertake some travel as part of his duties, the primary place of employment
shall be at Employer's principal offices, located at Itasca, Illinois. Employee
also shall be elected to (a) the Board of Directors, thereafter to be reelected
by the Shareholders of Employer, and (b) the Executive Committee of the Board.
2. Term. The initial term of the Agreement shall commence on
March 28, 2001, and shall expire on March 31, 2003 unless sooner terminated as
hereinafter provided. After expiration of the initial term, and subject to the
termination provisions hereinafter contained, the Agreement may be renewed for
additional one to five year periods by mutual written agreement of the parties.
If the Board chooses not to renew the Employee's contract, the Employee will be
entitled to severance as defined in the Section 6 below.
3. Duties. Employee will, during the term hereof (a)
faithfully and diligently do and perform all such acts and duties and furnish
such services as the Board of Directors of Employer shall direct, (b) do and
perform all acts in the ordinary course of Employer's business (with such limits
as the Board of Directors of Employer may prescribe) necessary and conducive to
Employer's best interests, (c) execute all duties attendant to his office, and
(d) devote his full time, energy, and skill to the business of Employer and to
the promotion of Employer's best interests, except for vacations, holidays,
holidays and absences made necessary because of illness and except that Employee
may participate in the affairs of any governmental, educational or charitable
institution, and serve as a member of the board of directors of other companies
so long as the Board of Directors of Employer does not determine that such
activities interfere with the business of Employer or diminish Employee's
obligations under the Agreement. Employee's performance under this Agreement
will be reviewed annually by the Board of Directors.
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4. Compensation. Employer shall pay to Employee for all
services to be performed by Employee during the term of the Agreement:
(a) A base annual salary at the rate of $480,000 (Base
Salary), payable in substantially equal periodic bi-weekly installments less
applicable deductions in accordance with Employer's practices for other
executives, as such practices may be determined from time to time. During
January of each year, the Employee's compensation shall be considered for an
annual review by the Board of Directors and Compensation Committee.
(b) Employee shall be eligible for a bonus for each fiscal
year of employment pursuant to his written objectives under the Management
Incentive Plan for Employer's senior management, which is adopted annually by
Employer's Board of Directors; provided that for 2001 the Employee will receive
a minimum of 100% bonus pay out, which bonus payment will be at least $312,000,
less applicable deductions.
(c) Any additional or special compensation, such as incentive
pay or bonuses, based upon Employee's performance, as the Board of Directors of
Employer, in its discretion, may from time to time determine.
(d) As of March 28, 2001, Employee shall be awarded an option
for 300,000 shares of Enesco stock, with an exercise price of the closing price
as of such date, with terms as if the option were granted under the 1996
Non-Qualified Stock Option Plan (Stock Option Grant).
(e) On or before April 6, 2001, the Employee will receive a
$140,000 signing bonus to reimburse Employee for certain lost compensation in
connection with his change of employment, less applicable deductions.
5. Fringe Benefits.
(a) Employee shall be eligible to participate in any incentive
plans or arrangements ("Incentive Plans") that Employer may establish or
practices it may follow for the benefit of its executives as in effect from time
to time, and shall be entitled to receive any other bonus or discretionary
compensation payments as Employer may determine from time to time.
(b) Employee shall be entitled to paid vacations in accordance
with Employer's customary vacation policy. Employee shall also be entitled to
all paid holidays given by Employer to its other senior executives.
(c) Employee and his dependents shall be entitled to
participate in and receive benefits under any qualified or supplemental defined
contribution retirement plan, health and dental plan, disability plan, survivor
income plan, and life insurance plan or arrangement ("Benefits Plans"), and any
additional or substitute Benefit Plans Employer
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may make available in the future to its senior executives, subject to and on a
basis consistent with the terms, conditions, and overall administration of such
Benefit Plans.
6. Termination.
(a) Employee shall have the right at any time during the term
of this Agreement to terminate his employment with the Employer upon giving
ninety (90) days written notice of said termination to Employer. In the event of
termination of his employment by Employee for any reason, Employer shall have no
further liability hereunder from and after the date of termination other than
the payment of all compensation (base salary and bonus, if any, payable in
accordance with the terms of the Management Incentive Plan) to Employee or his
heirs or his personal representatives for all periods prior to such termination.
(b) Employer shall have the right at any time during the term
of this Agreement to terminate the employment of Employee with Employer upon
giving notice to Employee. In the event of termination of his employment by
Employer for any reason other than "good cause," Employer shall continue to pay
Employee an amount equal to his Base Salary for twenty-four (24) months, plus
two bonus payments under the Management Incentive Plan of an amount equal to a
100% bonus payout (payable at the normal times that bonuses are paid under the
Management Incentive Plan), subject to Employee's execution of Employer's
standard form of Release, and Employer shall have no further liability to
Employee. The Employee may choose to receive his severance of twenty-four (24)
months of base pay and two (100%) bonus payments in one lump sum. In addition,
the Employee may exercise any stock options that have vested in accordance with
the terms of the Stock Option Grant. For purposes of the preceding sentence,
"good cause" shall be deemed to exist if, and only if:
(i) Employee shall engage, during the
performance of his duties hereunder in acts
or omissions constituting dishonesty,
intentional breach of fiduciary obligation,
moral turpitude, willful misconduct,
intentional wrongdoing or malfeasance;
(ii) Employee shall be convicted of a criminal
violation involving fraud, dishonesty or
moral turpitude; or
(iii) Employee shall materially breach the
Agreement other than by engaging in acts or
omissions enumerated in clauses (i) and (ii)
above), and such breach by its nature, is
incapable of being cured, or such breach
remains uncured for more than ten (10) days
following receipt by Employee of written
notice from Employer specifying the nature
of the breach and demanding the cure
thereof.
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7. Death. If Employee dies during the term of the
Agreement, Employer agrees to pay to a beneficiary designated in writing by
Employee, an amount equal to Employee's aggregate Base Salary (at the rate then
in effect) for a period of twelve (12) months from the date of death and an
amount equal to the annual average of Employee's bonus payments for the two
calendar years preceding the year of death. Such payments shall be made at the
same times as they would have been made to Employee if he were alive and
employed by Employer.
Any death benefits payable under this Paragraph 7 are in addition to any other
benefits due to Employee or his beneficiaries or dependents from Employer.
8. Disability. If during the term of this Agreement
Employee incurs a Disability, Employee's obligation to perform his services
hereunder will terminate and in such event Employer agrees:
(a) to continue to pay Employee his Base Salary (at the rate
then in effect) during a period equal to the lesser of twelve (12) months from
the date of onset of such Disability or the balance of the term of this
Agreement (the "Disability Period");
(b) to pay to Employee during the Disability Period the bonus
provided pursuant to Paragraph 4(b) of this Agreement; and
(c) during the Disability Period to continue to cover Employee
and his dependents under all health, dental, disability, accident and life
insurance plans or arrangements made available by Employer in which Employee or
his dependents were participating immediately prior to the date of onset of such
Disability as if Employee continued to be an employee of Employer; provided
that, if participation in any one or more of such plans and arrangements is not
possible under the terms thereunder, Employer will provide substantially
identical benefits.
Notwithstanding the foregoing, any payments to Employee
pursuant to subparagraphs (a) and (b) above shall be reduced by the amount of
any disability benefits otherwise payable to Employee under any disability
program(s) maintained by Employer. If Employee is receiving benefits hereunder
and his Disability ceases, his benefits under this Paragraph 8 shall terminate.
For purposes of the Agreement, the term "Disability" will have the same meaning
as in Employer's long-term disability plan, or if no such plan exists shall mean
a physical or mental disability, as determined by an independent physician
selected with the approval of both Employer and Employee, which will render
Employee incapable of performing his duties under the Agreement for 60 days or
more within any 365-day period.
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9. Noncompetition. In consideration of Employee's employment
hereunder, Employee hereby agrees that during the initial or any renewal term of
the Agreement and for a period of two years thereafter, he will not, singly,
jointly, or as a member, employee, or agent of any partnership or as an officer,
agent, employee, director or stockholder, or inventor of any other corporation
or entity, or in any other capacity, directly or indirectly:
(a) own, manage, operate, participate in, perform services for
or otherwise carry on, assist or be connected with a Competing Business doing
business anywhere within the respective territories in which Employer's business
is then carried on (provided that the foregoing shall not apply to any
corporation, partnership or other entity in which Employee (and/or his spouse
and/or children) only owns an ownership interest of one percent (1%) or less and
exercises not more than one percent (1%) of the voting control);
(b) solicit or contact (or assist in any solicitation or
contact of) any customer of Employer with a view toward inducing the purchase of
a Competing Product or otherwise diverting business from Employer;
(c) induce or attempt to persuade any employee or agent of
Employer to terminate such employment or agency relationship or violate the
terms of any agreement with Employer; or
(d) induce or attempt to persuade any customer or supplier of
Employer to terminate or materially change such relationship;
For purposes of this Agreement.
"Competing Products" means products, processes or services of
any person or organization other than Employer, in existence or under
development, which are substantially the same as or which perform the same
function or otherwise compete with any products, processes, or services
developed, manufactured or sold by Employer during the time of the Employee's
employment with the Employer or about which Employee acquires Confidential
Information through his relationship with Employer, including, but not limited
to, the creation, manufacturing, marketing and distribution of giftware,
collectibles and home decor product.
"Competing Business" means any person or organization engaged
in, or planning to become engaged in, research, development, production,
distribution, marketing, providing or selling of a Competing Product.
10. Confidentiality. Employee acknowledges that preservation
of a continuing business relationship between Employer and its subsidiaries and
its respective customers, representatives and employees is of critical
importance to the continued business success of Employer, that it is the policy
of Employer and its subsidiaries to guard
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as confidential the Confidential Information defined below, and that as Chief
Executive Officer Employee will acquire Confidential Information and personal
relationships with customers and prospective customers, which relationships may
constitute Employer's primary relationships with such customers and prospective
customers. In view of the foregoing, Employee agrees that, except as required
for the performance of his duties under this Agreement, he will not during the
initial or any renewal term of the Agreement and thereafter, without the prior
written consent of Employer, use for the benefit of himself or any third party
or disclose to any third party any Confidential Information. Employee further
agrees that if his employment by Employer is terminated for any reason, he will
not take with him but will leave with Employer all records and papers and all
matter of whatever nature which contains Confidential Information. For purposes
of this Agreement, "Confidential Information" means any information, including
any plan, drawing, specification, pattern, procedure, design, device, list or
compilation, which relates to the present or planned business of Employer which
has not been disclosed publicly by authorized representatives of Employer.
Confidential Information may include, for example, inventions, marketing and
sales plans or programs; customer and supplier information and lists; financial
data; purchasing and pricing information; product engineering information;
technological know-how; designs, plans or specifications regarding products and
materials; manufacturing processes and techniques; regulatory approval
strategies; computer programs, data, formulae and compositions; service
techniques and protocols; and new product strategies, plans and designs.
Confidential Information also includes all information received by Employer
under an obligation of confidentiality to a third party.
11. Patent and Trade Secret Agreement.
(a) Employee will promptly report to Employer all discoveries,
inventions or improvements of whatsoever nature conceived or made by him at any
time he was employed by Employer. All such discoveries, inventions and
improvements which are applicable in any way to Employer's business shall be the
sole and exclusive property of Employer.
(b) Whenever requested by Employer, whether during or
subsequent to his employment by Employer, Employee agrees to execute any papers
Employer may deem necessary for the protection of its interest in said
discoveries, inventions, and improvements, trade secrets and confidential
information, including written assignments of inventions to Employer.
(c) The covenants set forth in this Paragraph 11 are made by
Employee in consideration of the employment, or continuing employment of, and
the compensation paid to, Employee during his employment by Employer.
12. Remedies. Employee acknowledges that the services to be
rendered by him hereunder are of a special, unique and extraordinary character,
that it would be likely to be highly injurious to Employer or its successors in
interest with respect to the resulting disruption in their management, and by
reason of the foregoing Employee
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consents and agrees that if, during the term of the Agreement he violates any
provisions of the Agreement, Employer or its successors in interest shall be
entitled, in addition to any other remedies that they may have, including money
damages, to an injunction to be issued by a court of competent jurisdiction,
restraining him from committing or continuing any violation of the Agreement.
If, at any time, Employee violates, to any material extent, any of the covenants
or agreements set forth in Paragraphs 9, 10 and 11 of this Agreement, Employer
shall have the right to immediately terminate all of its obligations to make any
further payments under the Agreement.
13. Assignment. Neither Employee nor Employer may assign the
Agreement, except that Employer's obligations hereunder shall be binding legal
obligations of any successor to all or substantially all of Employer's business
by purchase, merger, consolidation, or otherwise.
14. Employee Assignment. No interest of Employee or his spouse
or any other beneficiary under the Agreement, or any right to receive any
payment or distribution hereunder, shall be subject in any manner to sale,
transfer, assignment, pledge, attachment, garnishment, or other alienation or
encumbrance of any kind, nor may such interest or right to receive a payment or
distribution be taken, voluntarily or involuntarily, for the satisfaction of the
obligations or debts of, or other claims against, Employee or his spouse or
other beneficiary, including claims for alimony, support, separate maintenance,
and claims in bankruptcy proceedings.
15. Benefits Unfunded. All rights of Employee and his spouse
or other beneficiary under the Agreement shall at all times be entirely unfunded
and no provision shall at any time be made with respect to segregating any
assets of Employer for payment of any amounts due hereunder. Neither Employee
nor his spouse or other beneficiary shall have any interest in or rights against
any specific assets of Employer, and Employee and his spouse or other
beneficiary shall have only the rights of a general unsecured creditor of
Employer.
16. Wavier. No waiver by either party at any time of any
breach by the other party of, or compliance with, any condition or provision of
the Agreement to be performed by the other party shall be deemed a waiver of any
other provisions or conditions at the same time or at any prior or subsequent
time.
17. Applicable Law. The Agreement shall be construed and
interpreted in all respects pursuant to the laws of the State of Illinois
(without regard to principles of conflicts of laws) applicable to contracts made
and to be performed within such State.
18. Entire Agreement. The Agreement contains the entire
Agreement between Employer and Employee and supersedes any and all previous
agreements, written or oral, between the parties relating to the subject matter
hereof. No amendment or modification of the terms of the Agreement shall be
binding upon either of the parties hereto unless reduced to writing and signed
by each of the parties hereto.
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19. Counterparts. The Agreement may be executed in
counterparts, each of which shall be deemed an original.
20. Severability. In the event any provision of the Agreement
is held illegal or invalid, the remaining provisions of the Agreement shall not
be affected thereby.
21. Successors. The Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, representatives
and successors.
22. Notices. Notices required under the Agreement shall be in
writing and shall be deemed duly given on the first business day after the day
of sending by national next-day courier service, upon confirmation of delivery
by telecopy or five business days after mailing by registered mail, return
receipt requested, to the following addresses or phone numbers or to such other
address or phone number as the party being notified may have previously
furnished to the others by written notice:
If to Employer: Anne-Lee Verville, Chairman of the Board
Enesco Group Inc.
225 Windsor Drive
Itasca, Illinois 60143
630-875-5300
With a copy to: General Counsel
Enesco Group, Inc.
225 Windsor Drive
Itasca, Illinois 60143
630-875-5300
630-875-8464 (telecopy)
If to Employee: Mr. Daniel DalleMolle
Chief Executive Officer
Enesco Group Inc.
225 Windsor Drive
Itasca, Illinois 60143
630-875-5300
With a copy to: Ron Parizek
Byrne Nadborne & Associates
206 S. Jefferson
Chicago, Illinois 60661
312-454-1500
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23. Arbitration. Except as to any matters in respect to which
Employer elects to proceed in accordance with the provisions of Paragraph 12
hereof, any controversy or claim arising out of the Agreement, or breach hereof,
shall be settled by arbitration in the City of Chicago pursuant to the rules and
procedures of J.A.M.S. Endispute before a single arbitrator. The arbitrator's
determination shall be final and binding upon all parties and judgement upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
24. Board Approval. The right and obligations of Employer
under the Agreement are contingent upon the approval or ratification by its
Board of Directors of the execution of the Agreement on its behalf.
25. Withholding. Employer may withhold from any payment that
it is required to make under this Agreement amounts sufficient to satisfy
applicable withholding requirements under any federal, state or local law.
26. Headings. The headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
any provision of the Agreement.
IN WITNESS WHEREOF, Employer and Employee have executed this
Agreement as of the day and year first above written.
Enesco Group, Inc.
By: /s/ Anne-Lee Verville
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Anne-Lee Verville
Chairman of the Board
Employee:
/s/ Daniel DalleMolle
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Daniel DalleMolle
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