Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Amendment No. 2 to Form S-1 124 804K
2: EX-1.1 Underwriting Agreement 54 165K
3: EX-2.1 Agreement and Plan of Contribution 54 159K
4: EX-3.2 Amended and Restated Cert. of Incorporation 19 66K
5: EX-3.3 Bylaws of Donna Karan International Inc. 20 42K
6: EX-5.1 Opinion of Proskauer Rose Goetz & Mendelsohn LLP 2 10K
15: EX-10.10 Stockholders Agreement 9 29K
16: EX-10.11 Donna Karen Incentive Compensation Plan 8 33K
7: EX-10.2 1996 Stock Incentive Plan 20 96K
8: EX-10.3 1996 Non-Employee Director Stock Option Plan 17 76K
9: EX-10.4 Registration Rights Agreement 33 106K
10: EX-10.5 Form License Agree. Bet Gab Studio & Donna Karan 55 109K
Co.
11: EX-10.6 Guaranty of Donna Karan International Inc. 3 11K
12: EX-10.7 Form of License Agree Bet Donna Karan & Stephen W 12 35K
13: EX-10.8 Employment Agreement/Donna Karan 20 51K
14: EX-10.9 Employment Agreement/Stephan Weiss 18 46K
17: EX-23.1 Consent of Ernst & Young LLP 1 8K
18: EX-24 Power of Attorney 1 10K
EX-10.9 — Employment Agreement/Stephan Weiss
| EX-10.9 | 1st Page of 18 | TOC | ↑Top | Previous | Next | ↓Bottom | Just 1st |
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EXHIBIT 10.9
WM&C DRAFT 6/6/96
EMPLOYMENT AGREEMENT
AGREEMENT entered as of the ____ day of June, 1996 by and between
DONNA KARAN INTERNATIONAL INC., a Delaware corporation, having an office at 550
Seventh Avenue, New York, NY 10018 (the "Company") and STEPHAN WEISS
("Executive").
W I T N E S S E T H:
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WHEREAS, Executive has provided valuable services to predecessor
entities of the Company for a period of years; and
WHEREAS, the Company wishes to secure the ongoing services of
Executive on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, it is agreed as
follows:
1. Employment. The Company hereby employs Executive and Executive
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hereby accepts employment by the Company on the terms and conditions hereinafter
set forth, to act as Vice Chairman of the Board of Directors of the Company and
its subsidiaries and affiliated companies.
2. Duties and Scope of Authority. The Company hereby agrees that,
-----------------------------
except to the extent that Executive otherwise consents in writing, during the
term of this Agreement:
(a) Executive shall have principal executive responsibility for
strategic planning for the Company, for the Company's beauty products operations
and for supervising legal matters as they relate to the Company;
(b) Executive shall be the sole Vice Chairman of the Board of
Directors of the Company;
(c) The Company shall cause Executive to be nominated as a
director of the Company on management's slate of nominees;
(d) No action will be taken by the Company to diminish the scope
of Executive's responsibility and authority as set forth herein, or to render it
difficult or impossible for Executive to carry out his duties.
3. Location; Office and Staff. During the term of this Agreement,
--------------------------
the Company's principal executive offices shall be in New York City and
Executive shall not be required to relocate to any other location. During the
term of this agreement the Company shall provide Executive with an office and
staff in the Company's New York City executive headquarters no less favorable to
Executive than that presently provided to him.
4. Devotion of Time. During the term hereof, Executive shall devote
----------------
such portion of his business time and attention to the business and affairs of
the Company and its subsidiaries and affiliated companies as he shall deem
necessary and use his best efforts to promote the business and reputation of the
Company and its subsidiaries and affiliated companies, provided that Executive
may devote a substantial portion of his business time and attention to other
activities, including the business and affairs of Gabrielle Studio, Inc.,
Stephan Weiss Studios, and Weiss & Sons, provided, that such activities shall
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not interfere with Executive's obligations to the Company. Executive shall have
no interest in, and will not perform any service for, any other business entity
which is in direct competition with the Company's principal product lines and
price points, which activity could reasonably be anticipated to have a material
adverse effect on the Company's business or operations taken as a whole, except
that this prohibition shall not apply to passive investments by Executive in
publicly-traded companies or Executive's investment in Gabrielle Studio, Inc.
5. Term. The term of this Agreement shall commence as of the date
----
hereof and shall continue for an initial term ending on the date which is twelve
months from the date hereof. Such initial term (the "Initial Term") shall
continue thereafter in automatically renewable successive terms of one year
periods as Vice-Chairman of the Board, unless terminated (i) by the Company for
"cause" as provided in paragraph 9(c) hereof, or (ii) by Executive as provided
in paragraphs 9(a) or 9(b) hereof.
6. Compensation. In consideration for the services to be rendered by
------------
Executive for any capacity for which he is employed hereunder, the Company
agrees to:
(a) pay to Executive a base salary at the rate of $500,000 per annum,
such amount to be paid in equal installments on the Company's regular payroll
dates. In years subsequent to 1996, such salary shall be adjusted by the
percentage increase in the Consumer Price Index for All Urban Customers ("CPI-
U") for the month of November immediately preceding the relevant annual
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period over the CPI-U of the preceding annual period. The "CPI-U" referred to
herein is that CPI-U published by the Bureau of Labor Statistics, U.S.
Department of Labor, for all United States cities (U.S. city average), based
upon 1982-4 equalling 100, or the successor or supplement thereto if publication
thereof should be discontinued or modified.
(b) pay to Executive an incentive bonus at the rate of $500,000 per
annum for the period commencing the date hereof and ending December 31, 1996,
and, in respect of each fiscal year of the Company during the term of employment
commencing with the 1997 fiscal year, pay to Executive an incentive bonus equal
to a percentage of Executive's then current annual salary, which percentage
shall be equal to: the Company's Adjusted Pretax Profit (as defined below) for
the fiscal year in question divided by $50,000,000 (which quotient shall be
expressed as a percentage) less 60 percentage points, which resulting percentage
will then be multiplied by 2.5. The incentive bonus shall not be less than zero
nor more than 100% of Executive's then current salary. If this Agreement
terminates at any time other than the end of a fiscal year, then Executive shall
be entitled to an incentive bonus equal to the product of the amount of the
incentive bonus payable for the fiscal year ended prior to the termination of
Executive's employment multiplied by a fraction, the numerator of which is the
number of days from the commencement of the Company's fiscal year in question to
the date of termination and the denominator of which
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is 365. Such incentive bonus shall be paid within fifteen (15) days of the
completion of the Company's audited financial statements with respect to any
fiscal year but not later than April 15 of the succeeding year.
For purposes hereof, the "Adjusted Pretax Profit" of the Company for
any fiscal year shall mean the pretax income from continuing operations before
(i) extraordinary items, (ii) cumulative effect of changes in accounting
principles for such fiscal year, (iii) royalties payable for such year by the
Company, its subsidiaries and affiliates to Gabrielle Studio, Inc. (iv) the
incentive bonuses payable to Donna Karan and Stephan Weiss (but only to the
extent these incentive bonuses have been accrued), (v) those costs associated
with operating a public company (i.e., directors' and officers' insurance,
preparation of Securities and Exchange Commission filings, etc.), and (vi) such
other adjustments as may be necessary to make the pretax income of the Company
for any fiscal year subsequent to 1996 comparable to the components of pretax
income of the Company for 1995.
(c) include Executive in the Company's employee benefit and stock
option plans, if any, upon terms commensurate with and in a manner consistent
with Executive's position in the Company and the terms of such plans, except
that Executive shall not participate in the Company's 1996 Stock Incentive Plan
and the 1996 Non-Employee Director Stock Option Plan (but shall be eligible to
participate in any subsequent Plans).
7. Expenses; Benefits. The Company shall pay or reimburse Executive
------------------
for all reasonable out-of-pocket expenses
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incurred in the performance of his services hereunder, in accordance with the
Company's applicable expense reimbursement and related policies and procedures
as in effect from time to time. In addition to Executive's base salary,
incentive bonus and employee benefits (if any), which shall be reviewed
periodically by the Compensation Committee of the Board of Directors of the
Company, Executive shall be entitled to participate in all group life, health,
hospital, medical and dental and disability insurance programs maintained by the
Company made available to senior executive officers of the Company generally.
Executive shall also be entitled to receive from the Company such benefits and
perquisites as are consistent with his position in the Company. Such benefits
provided by the Company shall include, but not be limited to:
(a) the use by Executive of a late model top of the line automobile
selected by him; payment by the Company or reimbursement to Executive of all
expenses incurred for maintaining and garaging such automobile; a driver for
such automobile; and payment to Executive annually of such amount as is required
to gross up the Executive for Federal, state and local taxes payable as a result
of these benefits.
(b) in all business travel, first-class transportation and lodging for
Executive and any of his family members traveling with him, if any, of a style
and nature which reflects the importance of Executive's position in the Company
and in the fashion industry.
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8. Vacation. Executive shall be entitled to take such vacations
--------
and attend such meetings, conferences and conventions as he, in his sole
discretion, shall determine to be consistent with his responsibilities
hereunder, but shall not be less than the time that has been available to him
for such vacation and other activities on behalf of the predecessor entities of
the Company.
9. Termination. (a) This Agreement may be terminated by Executive
-----------
at any time without reason by written notice effective not less than four (4)
months after the giving of such notice. For a period of one year after
termination of this Agreement by Executive pursuant to this Section 9(a),
Executive shall not participate or engage, directly or indirectly, for himself
or on behalf of or in conjunction with any person, partnership, corporation or
other entity, in any business activities that are directly competitive with the
Company's current principal product lines and price points and could reasonably
be expected to have a material adverse effect on the Company; provided, however,
-------- -------
that subject to the terms and provisions of that certain Stockholders Agreement
dated the date hereof by and amoung the Company, the Executive, Stephan Weiss,
the Trust under Trust Agreement for the benefit of Lisa Weiss Keyes, Corey Weiss
and Gabrielle Karan, and the Trust under Trust Agreement for the benefit of
Donna Karan this Section 9(a) shall in no way limit Executive's ability to
participate or engage, directly or indirectly, for himself or on behalf of or in
conjunction with any person, partnership, corporation or other entity, in the
business of Gabrielle Studio, Inc.
(b) This Agreement may be terminated by Executive at any time after
the date hereof for "good reason" by written
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notice effective immediately. A termination for "good reason" shall include:
(i) if at any time Executive shall (without his prior written
consent) not be a director or the Vice Chairman of the Board;
(ii) the assignment of duties and responsibilities to Executive,
or the assignment of duties and responsibilities to others, that reduce or
are otherwise inconsistent with Executive's duties and responsibilities as
set forth herein, in any such instance without his prior written consent;
(iii) the Company's failure to pay to Executive all amounts duly
required to be paid to him hereunder in accordance with the terms hereof
(including all benefits under pension, retirement, benefits, etc.);
(iv) any other breach by the Company of a material provision of
this Agreement;
(v) a "change in control" of the Company, i.e., any of the
following: (x) the acquisition (i) by any "person" (as such term is used in
Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
other than a person who is a shareholder of the Company on the effective
date of the registration statement filed under the Securities Act of 1933
as amended relating to the first public offering of securities of the
Company (an "Initial Shareholder") of 30% or more of the voting power of
securities of the
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Company, or (ii) the acquisition by an Initial Shareholder other than
Executive (and excluding and such acqusition resulting from a purchase,
sale or transfer of Takihyo Inc. stock by and between any of the current
stockholders of Takihyo Inc.) of an additional 5% of voting power of
securities of the Company over and above that owned immediately after the
closing date of the initial public offering of the Company's common stock;
(y) any merger or sale of substantially all of the assets of the Company
under circumstances where the holders of 20% or more of the equity
securities of the surviving entity of such transaction were not holders of
the Common Stock of the Company immediately prior to consummation of such
transaction; or (z) any change in the composition of the Board of Directors
of the Company not approved by: (i) a majority of the Board of Directors of
the Company prior to such change; and (ii) not less than two directors of
the Company who were directors prior to the time any "person" who was not
an Initial Shareholder acquired 30% or more of the voting power of
securities of the Company; and
(vi) a physician of acknowledged competency shall confirm in
writing to the Board of Directors of the Company that, in his professional
opinion, the demands of Executive's responsibilities hereunder are such
that it would materially and adversely affect his health for him to be
required to discharge the material aspects of his responsibilities
hereunder.
In the event of a termination by Executive for "good reason", the Company shall
pay to Executive a lump sum cash payment promptly
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(but in any event within ten days) after termination equal to the sum of
Executive's base salary, as then in effect, and incentive bonus (equal to the
incentive bonus paid to Executive in the fiscal year preceding the year in which
such termination occurred) for a period of one year. In such event, the Company
shall also pay to Executive an amount equal to three times the average incentive
bonus paid to Executive pursuant to paragraph 5(b) hereof in the three years
preceding the year (or in the event Executive has been employed for less than
three years for such number of years as the incentive bonus has been paid if
less than three) in which such termination occurred.
(c) This Agreement may be terminated by the Company as provided in
section 9(e) hereof and at any time after the date hereof only for "cause" (as
hereinafter defined) by written notice to Executive. The Company recognizes that
for a period of 10 years it (and its predecessor entities) has been fully
familiar with Executive's ability, competence and judgment. Accordingly,
"incompetence", "lack of diligence or judgment", "insubordination" and similar
faults shall not constitute grounds for termination for cause. For purposes of
this Agreement, "cause" shall mean only Executive's conviction in a court of law
of a crime involving money or other property of the Company. For a period of one
year after termination of this Agreement by the Company for cause, Executive
agrees not to participate or engage, directly or indirectly, for himself or on
behalf of or in conjunction with any person, partnership, corporation or other
entity, in any business activities that are directly competitive with the
Company's current principal product lines and price points and could
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reasonably be expected to have a material adverse effect on the Company. After
the date of termination of Executive's employment for cause, the Company shall
not be obligated to pay Executive his base salary or incentive bonus paid,
except for amounts due to the date of termination.
(d) This Agreement shall terminate automatically upon Executive's
death. In the event of termination of Executive's employment as a result of his
death, the Company shall pay to Executive's estate a lump sum cash payment
promptly after termination, equal to Executive's base salary as then in effect
and incentive bonus (equal to the incentive bonus paid to Executive in the
fiscal year preceding the year in which such termination occurred) for the
period which is remaining in the term of his employment agreement.
(e) This Agreement shall terminate at the option of the Company if
Executive shall suffer "disability". For purposes hereof, "disability" shall
mean the inability of Executive, due to physical, mental or other cause, to
perform his usual and normal duties hereunder for a consecutive period of six
(6) months. The Company shall notify Executive in writing of its decision to
terminate the Agreement due to Executive's disability. If Executive disputes
that he is "disabled," the Company may require Executive to submit to the
examination of a physician appointed by the Company for the purpose of
determining whether Executive is able to perform his material duties, and the
physician's decision shall be final and binding. In the event of
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termination of Executive's employment as a result of disability, the Company
shall pay to Executive a lump sum cash payment promptly after termination equal
to the sum of Executive's base salary as then in effect and incentive bonus
(equal to the incentive bonus paid to Executive in the fiscal year preceding the
year in which such termination occurred) for the period which is remaining in
the term of his employment agreement.
(f) Upon termination of Executive's employment under this Section 9
with respect to all positions and offices to which this Agreement relates,
Executive shall be deemed to have resigned as an officer of the Company and its
affiliates, if then so acting.
10. Confidential Information. (a) Executive acknowledges that
------------------------
because of his experience, knowledge and expertise and because of his duties and
his position of trust under this Agreement, he will be able to develop the
trust, confidence and good will of, and close relationships with, the customers
of the Company and will become familiar with the trade secrets and other
confidential information of the Company which are valuable assets and property
rights of the Company and its affiliates. Executive therefore agrees that he
will not, during the term of this Agreement or at any time thereafter, either
directly or indirectly, disclose to any person, firm or corporation such trade
secrets or other confidential information. Executive agrees to retain all such
trade secrets and other confidential information in a fiduciary capacity for the
sole
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benefit of the Company, its successors and assigns. Upon termination of his
employment by the Company or at any time that the Company may so request,
Executive will surrender to the Company all records, papers, notes, reports and
other documents (and all copies thereof) relating to the business of the Company
and its affiliates, which he may then possess or have under his control; except
that Executive shall be permitted to retain copies of all papers which relate to
those activities in which Executive is permitted to engage pursuant to the terms
of the License Agreement dated the date hereof by and between Gabrielle Studio,
Inc. and Donna Karan Studio and, except that Executive shall retain the right to
have access to and make copies and extracts of the Company's design, advertising
and public relations archives and to borrow products from the Company's archives
for temporary use, provided that in no event shall such access be used in any
business competitive with that of the Company. A matter shall no longer be
deemed a trade secret or confidential when it becomes publicly known through
no fault of Executive. The provisions of this paragraph shall survive the
expiration or termination of this Agreement.
(b) In the event that any of the covenants set forth in this paragraph
or in paragraph 9 hereof are more restrictive than permitted by the laws of this
jurisdiction in which the Company seeks enforcement thereof, each of such
covenants shall be deemed limited to the extent permitted by such laws and
modified to conform therewith by the Court or other
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tribunal before which an enforcement action is brought, in the exercise of its
equitable jurisdiction.
11. Equitable Remedies. The services of Executive are of a
------------------
unique nature and of extraordinary value and of such a character that a breach
by Executive of the non-compete provisions of paragraph 4 hereof will result in
irreparable damage and injury to the Company for which the Company will not have
any adequate remedy at law. Therefore, in the event that Executive commits or
threatens to commit a breach of his agreement not to compete, the Company shall
have the right and remedy to have the provisions of this Agreement specifically
enforced by any court having equity jurisdiction, it being agreed that in any
proceeding for an injunction, Executive's ability to answer in damages shall not
be a bar or interposed as a defense to the granting of such injunction. The
right and remedy enumerated above shall be in addition to, and not in lieu of,
any other rights and remedies available to the Company under law or equity. The
provisions of this paragraph 11 shall survive any expiration or termination of
this Agreement.
12. Separability. In the event that any provision or any
------------
portion of any provision of this Agreement shall be held to be void or
unenforceable, the remaining provisions of this Agreement (and the balance of
any provisions held void or unenforceable in part only) shall continue in full
force and effect.
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13. Authority to Enter Agreement. Executive represents and
----------------------------
warrants that he is not subject to any existing employment agreement, that he
has made no commitment of any kind whatsoever inconsistent with the provisions
of this Agreement.
14. No Mitigation. In the event Executive's employment is
-------------
terminated, Executive shall have no duty to mitigate the Company's financial
obligations to him, and any amounts he receives that might otherwise be
considered to mitigate such obligations shall not be deemed to do so.
15. Indemnification. The Company will indemnify Executive to
---------------
the fullest extent permitted by applicable law against all charges and expenses
(including reasonable legal expenses) in connection with any action or
proceeding he is made a party by reason of his being an employee, officer or
director of the Company.
16. Reimbursement of Expenses. In the event it becomes
-------------------------
necessary for Executive to sue on any aspect of this Agreement, and the Company
does not fully prevail, then the Company shall reimburse Executive for all of
his legal fees and expenses (on a grossed-up basis to give effect to any taxes
to Executive on such reimbursed amount) in pursuing such matter.
17. Assignment. This Agreement may not be assigned by
----------
Executive, but may be assigned by the Company to any successor in interest in a
transaction not constituting a "Change of Control" as set forth in paragraph
9(b)(v) hereof. This Agreement shall inure to the benefit of, and shall be
binding upon the Company,
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its permitted successors and assigns, and Executive, his legal representatives,
executors and administrators.
18. Entire Agreement. This Agreement contains the full and
----------------
complete understanding and agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings between the
parties with respect to the subject matter hereof.
19. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York, without giving
effect to the principles of conflicts of law provisions thereof.
20. Waiver; Amendments and Consents. No waiver by either party
-------------------------------
of any breach of any provision of this Agreement shall be deemed a waiver of any
preceding or succeeding breach of such provision or of any other provision
herein contained. Any amendment to this Agreement, and any consent or waiver by
a party hereto to any provision of this Agreement, shall be in writing and
delivered to both parties to this Agreement.
21. Notices. Except as otherwise specifically provided herein,
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any notice or other communication given hereunder shall be deemed sufficient if
delivered personally or sent by registered or certified mail, return receipt
requested, as follows:
If to the Company:
Donna Karan International Inc.
550 Seventh Avenue
New York, New York 10018
Attention: President
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If to Executive:
Mr. Stephan Weiss
550 Seventh Avenue
New York, New York 10018
The foregoing addresses may be changed by notice given in the manner
set forth in this paragraph.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
DONNA KARAN INTERNATIONAL INC.
By:________________________________
Name:
Title:
-----------------------------------
STEPHAN WEISS
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Dates Referenced Herein
| Referenced-On Page |
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| This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
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| |  |
| | 12/31/96 | | 4 | | | | | None on these Dates |
| Filed on: | | 6/10/96 |
| List all Filings |
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