On September 21, 2007, the Registrant elected Glenn S. Palmer as a new member of its board of directors.Prior to his appointment as a member of the Registrant's board of directors, Mr. Palmer was appointed as the Registrant's Chief Executive Officer and President on July 24, 2007.Mr. Palmer
has no family relationships with any of the Registrant's
other directors or executive officers.
On September 21, 2007, the compensation committee of the Registrant's
Board of Directors approved the Registrant's entry into a revised Employment Agreement with Mr. Palmer
and revisions to the termination provisions of the option previously granted to Mr. Palmer
on July 24, 2007.
The revised Employment Agreement is effective as of July 1, 2007, has an initial term through December 31, 2010, and is subject to automatic renewal thereafter for one-year terms unless either party gives the other party written notice of its intention to terminate the Employment Agreement at least 90 days prior to the expiration of the initial term or any renewal term.Under the terms of the Employment Agreement, Mr. Palmer
will receive base compensation for each of the third and fourth quarters of fiscal 2007 of $87,500 and minimum annual compensation for each of fiscal 2008 through 2010 of $400,000.Mr. Palmer is also entitled to receive an annual bonus equivalent to 2.5% of the Registrant's earnings before interest, taxes, depreciation and amortization for each of the years ended December 31, 2008 through 2010, and is eligible to receive a bonus for the period ended December 31, 2007, if any, as determined by the Compensation Committee of the Registrant's Board of Directors.Mr. Palmer
is also entitled to four weeks paid vacation and reimbursement of expenses, including up to $2,000 per month for all expenses incurred by Mr. Palmer
with respect to his
personal automobile.The Registrant
has also agreed to provide Mr. Palmer
with a furnished apartment or comparable living space in Los Angeles, California suitable to his
position for the initial twelve months of the term of the Employment Agreement.Additionally, the Registrant
has agreed to pay for no more than two coach or economy class round trip tickets per month from Los Angeles to New Jersey for Mr. Palmer
to visit with his
has agreed to establish a permanent residence within twenty miles of Los Angeles, California no later than July 1, 2008.Upon the termination of Mr. Palmer's
employment under the Employment Agreement before the expiration of its stated term by Mr. Palmer
for good reason or by the Registrant
for any reason other than death, disability or cause, the Registrant
has agreed to pay Mr. Palmer
12 months base salary plus a pro-rated bonus for the year during which such termination occurs as severance.
As an inducement material to Mr. Palmer's
decision to enter into employment with the Registrant
, the Registrant
previously granted to Mr. Palmer
an option to purchase 625,000 shares of the Registrant's
common stock.The option has a term of 10 years, a per share exercise price of $1.40 and will vest over a period of two years, with 125,000 shares vesting on the date of grant and 125,000 shares vesting on each subsequent six-month anniversary of the date of grant.The revised option provides that upon the termination of Mr. Palmer's employment with the Registrant, the option remains exercisable for various periods based on the circumstances under which Mr. Palmer's employment was terminated.
-------------------------------------------------------------------------------- Prior to joining the Registrant, Mr. Palmer was at Cerberus Capital Management, a leading private investment firm, where he served as Chief Executive Officer and President of Rafaella Apparel Group, a $250 million apparel manufacturing company.
In this position, he
led a $172 million debt financing and effectively managed the company through the Federated/May Company
acquisition.Previously, Mr. Palmer was Chief Executive Officer and President of Amerex Group, Inc., where he implemented a turnaround plan to position the outerwear and apparel manufacturing company for growth by reorganizing and rightsizing the company.
In addition, Mr. Palmer
also successfully launched a $10 million licensed urban business and a $15 million corporate/image business for the company.Prior to joining Amerex Group, Inc., Mr. Palmer held senior management positions with various apparel companies including Best Manufacturing Group, LLC, Liz Claiborne, Bonaventure Textiles USA, Ellen Tracy, Foxmoor Specialty Stores Corp. and Bloomingdales.
...Mr. Palmer began his career at Macy's New York from 1978-1988, where he held various merchandising positions including buyer and division merchandise vice president.Mr. Palmer graduated from the University of Rhode Island in 1975 with a degree in Organizational Management and Industrial Relations.
...10.1 Employment Agreement effective July 1, 2007, between the Registrant and Glenn S. Palmer.