EXHIBIT 10.73
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT is made and effective as of the first day of
April, 1999, by and between TARRANT MEXICO, S. de X.X. de C.V., a corporation
organized under the laws of the Republic of Mexico (the "Company"), and XXXXX
XXXXX (the "Employee"), with respect to the following facts:
The Company desires to be assured of the continued association and
services of the Employee in order to take advantage of his experience, knowledge
and abilities in the Company's business, and is willing to employ the Employee,
and the Employee desires to be so employed, on the terms and conditions set
forth in this Agreement.
ACCORDINGLY, on the basis of the representations, warranties and
covenants contained herein, the parties hereto agree as follows:
1. EMPLOYMENT
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1.1 Employment. The Company hereby employs the Employee as
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President, and the Employee hereby accepts such employment, on the terms and
conditions set forth below, to perform during the term of this Agreement such
services as are required hereunder.
1.2 Duties. The Employee shall render such services to the
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Company, and shall perform such duties and acts, as reasonably may be required
by the Company's Board of Directors in connection with any aspect of the
Company's business.
1.3 Performance of Duties. The Employee shall devote such
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time, ability and attention to his duties hereunder as may be necessary or
advisable to discharge his duties hereunder in a professional and businesslike
manner and shall diligently and conscientiously use his best efforts to further
the Company's business.
1.4 Noncompetition / Trade Secrets. During his employment
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by the Company and for three (3) years thereafter (such period not to include
any period of violation hereof by Employee or period which is required for
litigation to enforce this paragraph and during which the Employee is in
violation hereof), the Employee shall refrain, without the prior written consent
of the Company in each instance, from engaging in any Competitive Activity, as
defined below, which would be reasonably likely, as determined by the Company in
its reasonable discretion, to result in the disclosure or use of any Trade
Secrets, as defined below. Employee shall not, without the prior written consent
of the Company's Board of Directors in each instance, disclose or use in any
way, except as required in the course of such employment, any confidential
business or technical information or trade secret of the Company acquired in the
course of such employment, whether or not patentable, copyrightable or otherwise
protected by law, and whether or not conceived of or prepared by him
(collectively, the "Trade Secrets"), including, without limitation, any
information concerning customer lists, products, procedures, operations,
investments, financing, costs, employees, purchasing, accounting, marketing,
merchandising, sales, salaries, pricing, profits and plans for future
development, the identity, requirements, preferences, practices and methods of
doing business of specific parties with whom the Company transacts business, and
all other information which is related to any product, service or business of
the Company, other than information which is generally known in the industry in
which the Company transacts business or is acquired from public sources; all of
which Trade Secrets are the exclusive and valuable property of the Company. As
used in this Agreement, the term "Competitive Activity" shall mean any
participation in, assistance of, employment by, ownership of any interest in,
acceptance of business from or assistance, promotion or organization of any
person, partnership, corporation, firm, association or other business
organization, entity or enterprise which, directly or indirectly, is engaged in,
or hereinafter engages in, the production of any apparel product, whether as an
agent, consultant, employee, officer, director, investor, partner, shareholder,
proprietor or in any other individual or representative capacity, but excluding
the holding for investment of less than five percent (5%) of the outstanding
securities of any corporation which are regularly traded on a recognized stock
exchange.
1.5 Tangible Items. All files, accounts, records,
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documents, books, forms, notes, reports, memoranda, studies, compilations of
information, correspondence and all copies, abstracts and summaries of the
foregoing, and all other physical items related to the Company, other than a
merely personal item, whether of a public nature or not, and whether prepared by
the Employee or not, are and shall remain the exclusive property of the Company
and shall not be removed from the premises of the Company, except as required in
the course of employment by the Company, without the prior written consent of
the Company's Board of Directors in each instance, and the same shall be
promptly returned to the Company by the Employee on the expiration or
termination of his employment by the Company or at any time prior thereto upon
the request of the Company.
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1.6 Solicitation of Employees. During his employment by the
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Company and for one (1) year thereafter (such period not to include any period
of violation hereof by the Employee or period which is required for litigation
to enforce this paragraph and during which the Employee is in violation hereof),
the Employee shall not, directly or indirectly, either for his own benefit
purposes or the benefit of purposes of any other person employ or offer to
employ, call on, solicit, interfere with or attempt to divert or entice away any
employee or independent contractor of the Company (or any person whose
employment or status as an independent contractor has terminated within the
twelve (12) months preceding the date of such solicitation) in any capacity if
that person possess or has knowledge of any Trade Secrets of the Company.
1.7 Injunctive Relief. The Employee hereby acknowledges and
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agrees that it would be difficult to fully compensate the Company for damages
resulting from the breach or threatened breach of Sections 1.4, 1.5 and 1.6 and,
accordingly, that the Company shall be entitled to temporary and injunctive
relief, including temporary restraining orders, preliminary injunctions and
permanent injunctions, to enforce such provisions without the necessity of
proving actual damages and without the necessity of posting any bond or other
undertaking in connection therewith. This provision with respect to injunctive
relief shall not, however, diminish the Company's right to claim and recover
damages.
2. COMPENSATION
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2.1 Compensation. As the total consideration for the
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services which the Employee renders hereunder, the Employee shall be entitled to
the following:
(a) an annual base salary of U.S. $1,000,000.00,
subject to such periodic increases, if any, as the Board of Directors may deem
to be appropriate in its sole discretion, less any applicable deduction
therefrom for income tax or other applicable withholdings;
(b) reimbursement of any and all reasonable and
documented expenses (including, but not limited to, air fare, car rental,
lodging, meals, business telephone and related travel expenses) incurred by the
Employee from time to time in the performance of his duties hereunder, which
reimbursement shall be made in accordance with the Company's policies and
procedures as the same may be amended from time to time;
(c) participation in all plans or programs sponsored
by the Company for employees in general, including, but not limited to,
participation in any group health plan, medical reimbursement plan, life
insurance plan, or pension and profit sharing plan; and
(d) the right to purchase up to 500,000 shares of the
Common Stock of Tarrant Apparel Group, a California corporation, on the terms
and conditions set forth on Exhibit A.
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3. TERM AND TERMINATION
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3.1 Term. Unless sooner terminated pursuant to Section 3.2
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hereof, the term of the Employee's relationship with the Company under Section
1.1 shall be for a three-year period (the "Term") commencing on the date hereof
and ending on April 1, 2002.
3.2 At Will Relationship. The Employee and the Company each
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hereby acknowledges and agrees that, except as expressly set forth in Section
3.3, (i) the Employee's relationship with the Company under this Agreement is AT
WILL and can be terminated at the option of either the Employee or the Company
in his or its sole and absolute discretion, for any or no reason whatsoever,
with or without cause, (ii) no representations, warranties or assurances have
been made concerning the length of such relationship or the aggregate amount of
compensation to be received by the Employee and (iii) after the termination of
his employment by the Company, the Employee shall have no right, title or
interest in or claim to any revenues received by the Company from any person for
any goods sold or services rendered by the Company to such person, whether or
not the Employee was the cause, in whole or in part, for such person to purchase
such goods from the Company or to retain the Company to perform such services.
3.3 Duties Upon Termination. In the event that the
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Employee's employment by the Company under this Agreement is terminated, neither
the Company nor the Employee shall have any remaining duties or obligations
hereunder, except that (i) the Company shall promptly pay to the Employee, or
his estate, all
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reimbursable expenses incurred by the Employee hereunder as of such date and
such compensation as is due pursuant to Section 2.1, prorated through the date
of termination, and (ii) the Employee shall continue to be bound by Sections
1.4, 1.5, 1.6 and 1.7.
4. MISCELLANEOUS
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4.1 Severable Provisions. The provisions of this Agreement
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are severable, and if any one or more provisions may be determined to be illegal
or otherwise unenforceable, in whole or in part, the remaining provisions, and
any partially unenforceable provisions to the extent enforceable, shall
nevertheless be binding and enforceable.
4.2 Successors and Assigns. All of the terms, provisions
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and obligations of this Agreement shall inure to the benefit of and shall be
binding upon the parties hereto and their respective heirs, representatives,
successors and assigns. Notwithstanding the foregoing, neither this Agreement
nor any rights hereunder shall be assigned, pledged, hypothecated or otherwise
transferred by the Employee without the prior written consent of the Company in
each instance.
4.3 Governing Law. The validity, construction and
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interpretation of this Agreement shall be governed in all respects by the laws
of the State of California applicable to contracts made and to be performed
wholly within that State.
4.4 Consent to Jurisdiction. Each party hereto, to the
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fullest extent it may effectively do so under applicable law, irrevocably (i)
submits to the exclusive jurisdiction of any court of the State of California or
the United States of America sitting in the City of Los Angeles over any suit,
action or proceeding arising out of or relating to this Agreement, (ii) waives
and agrees not to assert, by way of motion, as a defense or otherwise, any claim
that it is not subject to the jurisdiction of any such court, any objection that
it may now or hereafter have to the establishment of the venue of any such suit,
action or proceeding brought in any such court and any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum, (iii) agrees that a judgment in any such suit, action or
proceeding brought in any such court shall be conclusive and binding upon such
party and may be enforced in the courts of the United States of America or the
State of California (or any other courts to the jurisdiction of which such party
is or may be subject) by a suit upon such judgment and (iv) consents to process
being served in any such suit, action or proceeding by mailing a copy thereof by
registered or certified air mail, postage prepaid, return receipt requested, to
the address of such party specified in or designated pursuant to Section 4.7.
Each party agrees that such service (i) shall be deemed in every respect
effective service of process upon such party in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by law, be taken and
held to be valid personal service upon and personal delivery to such party.
4.5 Headings. Section and subsection headings are not to be
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considered part of this Agreement and are included solely for convenience and
reference and in no way define, limit or describe the scope of this Agreement or
the intent of any provisions hereof.
4.6 Entire Agreement. This Agreement constitutes the entire
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agreement between the parties hereto pertaining to the subject matter hereof,
and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, relating to the subject matter of this
Agreement. No supplement, modification, waiver or termination of this Agreement
shall be valid unless executed by the party to be bound thereby. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.
4.7 Notices. Any notice or other communication required or
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permitted hereunder shall be in writing and shall be deemed to have been given
(i) if personally delivered, when so delivered, (ii) if mailed, one (1) week
after having been placed in the United States mail, registered or certified,
postage prepaid, addressed to the party to whom it is directed at the address
set forth below or (iii) if given by telex or telecopier, when such notice or
other communication is transmitted to the telex or telecopier number specified
below and the
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appropriate answerback or telephonic confirmation is received. Either party may
change the address to which such notices are to be addressed by giving the other
party notice in the manner herein set forth.
4.8 Attorneys' Fees. In the event any party takes legal
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action to enforce any of the terms of this Agreement, the unsuccessful party to
such action shall pay the successful party's expenses, including attorneys'
fees, incurred in such action.
4.9 Third Parties. Nothing in this Agreement, expressed or
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implied, is intended to confer upon any person other than the Company or the
Employee any rights or remedies under or by reason of this Agreement.
4.1 Construction. This Agreement was reviewed by legal
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counsel for each party hereto and is the product of informed negotiations
between the parties hereto. If any part of this Agreement is deemed to be
unclear or ambiguous, it shall be construed as if it were drafted jointly by the
parties. Each party hereto acknowledges that no party was in a superior
bargaining position regarding the substantive terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date and year first set forth above.
Company: TARRANT APPAREL GROUP
By /s/ Xxxxxx Xxxx
______________________________________
Authorized Representative
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
Employee:
/s/ Xxxxx Xxxxx
______________________________________
XXXXX XXXXX
Xxxxx Xxxxx Xxx #231
Col. Xxxxxxx, X.X. 00000
Xxxxxx, D.F.
Telecopier: (000) 000-0000
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EXHIBIT A
TARRANT APPAREL GROUP
1997 EMPLOYEE INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
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This Stock Option Agreement ("Agreement") is made and entered into as
of the Date of Grant indicated below by and between Tarrant Apparel Group, a
California corporation (the "Company"), and the person named below
("Participant").
WHEREAS, Participant is an employee, director or independent
contractor of the Company or one or more of its subsidiaries; and
WHEREAS, pursuant to the Company's 1997 Employee Incentive Plan (the
"Plan"), the committee of the Board of Directors of the Company administering
the Plan (the "Committee") has approved the grant to Participant of an option to
purchase shares of the common stock of the Company (the "Common Stock"), on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
1. Grant Of Option; Certain Terms and Conditions.
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(a) The Company hereby grants to Participant, and Participant hereby
accepts, as of the Date of Grant, an option to purchase the number of shares of
Common Stock indicated below (the "Option Shares") at the Exercise Price per
share indicated below, which option shall expire at 5:00 p.m., California time,
on the Expiration Date indicated below and shall be subject to all of the terms
and conditions set forth in this Agreement (the "Option"). On each anniversary
of the Date of Grant, the option shall become exercisable to purchase, and shall
vest with respect to, that number of Option Shares (rounded to the nearest whole
share) equal to the total number of Option Shares multiplied by the Annual
Vesting Rate indicated below.
Participant: XXXXX XXXXX
Date of Grant: ________, 1999
Number of shares purchasable: _______
Exercise Price per share: ________________
Expiration Date: ________, 2009
Annual Vesting Rate: 33.333%
The Option is not intended to qualify as an incentive stock option under Section
422 of the Internal Revenue Code of 1986, as amended (an "Incentive Stock
Option").
(b) Notwithstanding anything to the contrary contained herein, in the
event the EBITDA of Jamil and Twillmex (as determined by the Company) shall be
less than the amount set forth below for any fiscal year, then the right of the
Participant to purchase that number of Option Shares which first would have
become purchasable hereunder on the next succeeding anniversary of the Date of
Grant shall be deferred until the date ten business days before the Expiration
Date.
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Fiscal Year
Ended Operating
December 31 Income
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1999 $12 million
2000 $30 million
2001 $33 million
2. Acceleration and Termination of Option.
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(a) Termination of Employment.
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(i) Retirement. If Participant shall cease to be an
employee of the Company or any of its subsidiaries (such an event shall be
referred to herein as the "Termination of Employee's Employment") by reason
of Participant's retirement in accordance with the Company's then current
retirement policy ("Retirement"), then (A) the portion of the Option that
has not vested on or prior to the date of such Retirement shall terminate
on such date and (B) the remaining vested portion of the Option shall
terminate upon the Expiration Date.
(ii) Death or Permanent Disability. If Participant's
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Employment is Terminated by reason of the death or Permanent Disability (as
hereinafter defined) of Participant, then (A) the portion of the Option
that has not vested on or prior to the date of such Termination of
Employment shall terminate on such date and (B) the remaining vested
portion of the Option shall terminate upon the earlier of the Expiration
Date or the first anniversary of the date of such Termination of
Employment. "Permanent Disability" shall mean the inability to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or
that has lasted or can be expected to last for a continuous period of not
less than 12 months. Participant shall not be deemed to have a Permanent
Disability until proof of the existence thereof shall have been furnished
to the Board in such form and manner, and at such times, as the Board may
require. Any determination by the Board that Participant does or does not
have a Permanent Disability shall be final and binding upon the Company and
Participant.
(iii) Other Termination. If Participant's Employment is
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Terminated for no reason, or for any reason other than Retirement, death or
Permanent Disability, then the Option shall terminate upon the date of such
Termination of Employment.
(b) Death Following Termination of Employment. Notwithstanding
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anything to the contrary contained in this Agreement, if Participant shall die
at any time after the Termination of his or her Employment and prior to the
Expiration Date, then (i) the portion of the Option that has not vested on or
prior to the date of such death shall terminate on such date and (ii) the
remaining vested portion of the Option shall terminate.
(c) Acceleration of Option. The Committee, in its sole discretion,
----------------------
may accelerate the exercisability of the Option at any time and for any reason.
(d) Termination of Option. Notwithstanding anything to the contrary
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contained in this Agreement, the Option shall terminate upon the consummation of
any of the following events, or, if later, the thirtieth day following the first
date upon which such event shall have been approved by both the Board and the
shareholders of the Company:
(i) the dissolution or liquidation of the Company; or
(ii) a sale of substantially all of the property and
assets of the Company, unless the terms of such sale shall provide
otherwise.
3. Adjustments. In the event that the outstanding securities of the
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class then subject to the Option are increased, decreased or exchanged for or
converted into cash, property or a different number or kind of securities, or
cash, property or securities are distributed in respect of such outstanding
securities, in either case as a result of a reorganization,
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merger, consolidation, recapitalization, reclassification, dividend (other than
a regular cash dividend) or other distribution, stock split, reverse stock split
or the like, or in the event that substantially all of the property and assets
of the Company are sold, then, unless such event shall cause the Option to
terminate pursuant to Section 2(d) hereof, the Committee shall make appropriate
and proportionate adjustments in the number and type of shares or other
securities or cash or other property that may thereafter be acquired upon the
exercise of the Option; provided, however, that any such adjustments in the
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Option shall be made without changing the aggregate Exercise Price of the then
unexercised portion of the Option.
4. Exercise.
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(a) The Option shall be exercisable during Participant's
lifetime only by Participant or by his or her guardian or legal representative,
and after Participant's death only by the person or entity entitled to do so
under Participant's last will and testament or applicable intestate law. The
Option may only be exercised by (i) the delivery to the Company of a written
notice of such exercise, which notice shall specify the number of Option Shares
to be purchased (the "Purchased Shares") and the aggregate Exercise Price for
such shares (the "Exercise Notice"), together with payment in full of such
aggregate Exercise Price in cash or by check payable to the Company; provided,
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however, payment of such aggregate Exercise Price may instead be made, in whole
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or in part, by (i) the delivery to the Company of a certificate or certificates
representing shares of Common Stock, duly endorsed or accompanied by a duly
executed stock powers, which delivery effectively transfers to the Company good
and valid title to such shares, free and clear of any pledge, commitment, lien,
claim or other encumbrance (such shares to be valued on the basis of the
aggregate Fair Market Value (as defined below) thereof on the date of such
exercise), provided that the Company is not then prohibited from purchasing or
acquiring such shares of Common Stock, or (ii) the Participant authorizing a
third party to sell a portion of the Purchased Shares and remitting to the
Company a sufficient portion of the sale proceeds to pay the entire Exercise
Price and any tax withholding resulting from such exercise.
(b) The "Fair Market Value" of a Common Share on any date (the
"Determination Date") shall be equal to the closing price per Common Share on
the business day immediately preceding the Determination Date, as reported in
The Wall Street Journal, Western Edition, or, if no closing price was so
reported for such immediately preceding business day, the closing price for the
next preceding business day for which a closing price was so reported, or, if no
closing price was so reported for any of the 30 business days immediately
preceding the Determination Date, the average of the high bid and low asked
prices per Common Share on the business day immediately preceding the
Determination Date in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ")
or such other system then in use, or, if the Common Shares were not quoted by
any such organization on such immediately preceding business day, the average of
the closing bid and asked prices on such day as furnished by a professional
market maker making a market in the Common Shares selected by the Board.
5. Payment of Withholding Taxes. If the Company becomes obligated
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to withhold an amount on account of any tax imposed as a result of the exercise
of the Option, including, without limitation, any federal, state, local or other
income tax, or any F.I.C.A., state disability insurance tax or other employment
tax, then Participant shall, on the first day upon which the Company becomes
obligated to pay such amount to the appropriate taxing authority, pay such
amount to the Company in cash or by check payable to the Company. At the
election of the Participant, and subject to such rules as the Company may
establish, such withholding obligations may be satisfied through the surrender
of Common Shares which the Participant already owns or to which the Participant
otherwise is entitled under the Plan.
6. Notices. All notices and other communications required or
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permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed given if delivered personally or five days after mailing by certified
or registered mail, postage prepaid, return receipt requested, to the Company at
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Chief
Financial Officer, or to Participant at the address set forth beneath his or her
signature on the signature page hereto, or at such other addresses as they may
designate by written notice in the manner aforesaid.
7. Stock Exchange Requirements; Applicable Laws. Notwithstanding
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anything to the contrary in this Agreement, no shares of stock purchased upon
exercise of the Option, and no certificate representing all or any part of such
shares, shall be issued or delivered if (i) such shares have not been admitted
to listing upon official notice of issuance on each stock exchange upon which
shares of that class are then listed or (ii) in the opinion of counsel to the
Company, such issuance or delivery would cause the Company to be in violation of
or to incur liability under any federal, state or other securities law, or any
requirement of any stock exchange listing agreement to which the Company is a
party, or any other requirement of law or of any administrative or regulatory
body having jurisdiction over the Company.
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8. Transferability. Neither the Option nor any interest therein may
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be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than by will or the laws of descent and
distribution.
9. Plan. The Option is granted pursuant to the Plan, as in effect
----
on the Date of Grant, and is subject to all the terms and conditions of the
Plan, as the same may be amended from time to time; provided, however, that no
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such amendment shall deprive Participant, without his or her consent, of the
Option or of any of Participant's rights under this Agreement. The
interpretation and construction by the Committee of the Plan, this Agreement,
the Option and such rules and regulations as may be adopted by the Committee for
the purpose of administering the Plan shall be final and binding upon
Participant. Until the Option shall expire, terminate or be exercised in full,
the Company shall, upon written request therefor, send a copy of the Plan, in
its then-current form, to Participant or any other person or entity then
entitled to exercise the Option.
10. Shareholder Rights. No person or entity shall be entitled to
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vote, receive dividends or be deemed for any purpose the holder of any Option
Shares until the Option shall have been duly exercised to purchase such Option
Shares in accordance with the provisions of this Agreement.
11. Employment or Contract Rights. No provision of this Agreement or
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of the Option granted hereunder shall (i) confer upon Participant any right to
continue in the employ of or contract with the Company or any of its
subsidiaries, (ii) affect the right of the Company and each of its subsidiaries
to terminate the employment or contract of Participant, with or without cause,
or (iii) confer upon Participant any right to participate in any employee
welfare or benefit plan or other program of the Company or any of its
subsidiaries other than the plan. Participant hereby acknowledges and agrees
that the Company and each of its subsidiaries may terminate the employment or
contract of Participant at any time and for any reason, or for no reason, unless
Participant and the Company or such subsidiary are parties to a written
employment or independent contractor agreement that expressly provides
otherwise.
12. Governing Law. This Agreement and the Option granted hereunder
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shall be governed by and construed and enforced in accordance with the laws of
the State of California without reference to choice or conflict of law
principles.
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IN WITNESS WHEREOF, the Company and Participant have duly executed
this Agreement as of the Date of Grant.
TARRANT APPAREL GROUP
By ________________________________
Authorized Representative
PARTICIPANT
___________________________________
XXXXX XXXXX
Xxxxx Xxxxx Xxx #231
Col. Xxxxxxx, X.X. 00000
Xxxxxx, D.F.
Telecopier: (000) 000-0000
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