EMPLOYMENT AGREEMENT
AGREEMENT,
made and entered into as of December 19, 2007 (the “Effective Date”) by and
between THE WARNACO GROUP, INC., a Delaware corporation (together with its
successors and assigns, the “Company”), and XXXXXX X. XXXXXX (the
“Executive”).
WHEREAS,
the Company desires to continue to employ the Executive as its President
and
Chief Executive Officer and to amend and restate the Executive’s current
employment agreement dated as of December 22, 2004 embodying the terms of
such
continued employment and the Executive desires to enter into this amended
and
restated agreement and to accept such continued employment, subject to the
terms
and provisions of this Agreement;
1.
Definitions.
(a) “Affiliate”
of a specified person or entity shall mean a person or entity that directly
or
indirectly controls, is controlled by, or is under common control with, the
person or entity specified.
(b) “Annual
Bonus” shall have the meaning ascribed to such term in Section 5
below.
(c) “Base
Salary” shall mean the annualized salary provided for in Section 4
below.
(d) “Board”
shall mean the Board of Directors of the Company.
(e) “Bonus
Plan” shall have the meaning ascribed to such term in Section 5
below.
(f) “Cause”
shall mean:
(i) willful
misconduct by the Executive which causes material harm to the Company’s
interests;
(ii) willful
and material breach of duty by the Executive in the course of his employment,
which, if curable, is not cured within 10 days after Executive’s receipt of
written notice from the Company;
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(iii) willful
failure by the Executive, after having been given written notice from the
Company, to perform his duties other than a failure resulting from Executive’s
incapacity due to physical or mental illness; or
(iv) indictment
of the Executive for a felony, a crime involving moral turpitude or any other
crime involving the business of the Company which, in the case of such crime
involving the business of the Company, is injurious to the business of the
Company.
For
purposes of this Cause definition, no act or failure to act, on the part
of the
Executive, shall be considered willful unless it is done, or omitted to be
done,
by him in bad faith and without reasonable belief that his action was in
the
best interests of the Company. The determination to terminate the
Executive’s employment for Cause shall be made by the Board and prior to such
determination the Executive shall have the right to appear before the Board
or a
committee designated by the Board.
(g) “Change
in Control” shall mean any of the following:
(i) any
“person” (as such term is used in Sections 3(a)(9) and 13(d) of the Securities
Exchange Act of 1934) or group of persons acting jointly or in concert, but
excluding a person who owns more than 5% of the outstanding shares of the
Company as of the date of this Agreement, becomes a “beneficial owner” (as such
term is used in Rule 13d-3 promulgated under that Act), of 50% or more of
the
Voting Stock of the Company;
(ii) all
or substantially all of the assets of the Company are disposed of pursuant
to a
merger, consolidation or other transaction (unless the shareholders of the
Company immediately prior to such merger, consolidation or other transaction
beneficially own, directly or indirectly, in substantially the same proportion
as they owned the Voting Stock of the Company, all of the Voting Stock or
other
ownership interests of the entity or entities, if any, that succeed to the
business of the Company); or
(iii) approval
by the shareholders of the Company of a complete liquidation or dissolution
of
all or substantially all of the assets of the Company.
For
purposes of this Change in Control definition, “Voting Stock” shall mean the
capital stock of any class or classes having general voting power, in the
absence of specified contingencies, to elect the directors of the
Company.
(h) “Date
of Termination” shall mean:
(i) if
the Executive’s employment is terminated by the Company, the date specified in
the notice by the Company to the Executive that his
2
employment
is so terminated;
(ii) if
the Executive voluntarily resigns his employment (including upon Retirement),
90
days after receipt by the Company of written notice that the Executive is
terminating his employment (provided, that in the case of a voluntary
resignation (other than a Retirement) the Company may accelerate the Date
of
Termination to an earlier date by providing the Executive with written notice
of
such action (which notice shall not affect the status of such termination
as a
voluntary resignation by the Executive), or, alternatively, the Company may
place the Executive on paid leave (covering only Base Salary) during such
period);
(iii) if
the Executive’s employment is terminated by reason of death, the date of
death;
(iv) if
the Executive’s employment is terminated for Disability, 30 days after written
notice is given as specified in Section 1(i) below; or
(v) if
the Executive resigns his employment for Good Reason, 30 days after receipt
by
the Company of timely written notice from the Executive in accordance with
Section 1(j) below unless the Company cures the event or events giving rise
to
Good Reason within 30 days after receipt of such written notice.
(i) “Disability”
shall mean the Executive’s inability, due to physical or mental incapacity, to
substantially perform his duties and responsibilities for a period of 180
consecutive days as determined by a medical doctor selected by the Company
and
reasonably acceptable to the Executive. In no event shall any
termination of the Executive’s employment for Disability occur until the Party
terminating his employment gives written notice to the other Party in accordance
with Section 25 below.
(j) “Good
Reason” shall mean the occurrence of any of the following without the
Executive’s prior written consent:
(i) a
material diminution in the Executive’s authority, duties or responsibilities as
Chief Executive Officer of the Company or the assignment to the Executive
of any
duties materially inconsistent with such position;
(ii) a
reduction in (A) Base Salary or (B) Target Bonus opportunity (as a percentage
of
Base Salary) or the failure of the Company to grant (C) the annual equity
award
in accordance with Section 6(a) below or (D) the Supplemental Award as set
forth
in Section 6(b) below unless, in the case of (C), the Company provides a
similar
target opportunity pursuant to a successor plan or otherwise, and in the
case of
(D), the Company awards to the Executive an annual award or awards of equivalent
value (and
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vesting
provisions) to the award in respect of which there was failure to make a
grant,
whether pursuant to a successor plan or otherwise;
(iii) a
change in reporting structure so that the Executive reports to someone other
than the Board, or the Chairman of the Board as the Board’s
designee;
(iv) the
failure by the Company to nominate or renominate the Executive as a member
of
the Board, or the removal by the Company of the Executive as President and
Chief
Executive Officer of the Company or the removal of the Executive from the
Board
(other than due to a failure of shareholders of the Company to elect
him);
(v) requiring
the Executive to be principally based at any office or location more than
50
miles from mid-town Manhattan; or
(vi) the
failure of a successor to all or substantially all of the assets of the Company
to assume the Company’s obligations under this Agreement either as a matter of
law or in writing within 15 days after a merger, consolidation, sale or similar
transaction.
Anything
herein to the contrary notwithstanding, the Executive shall not be entitled
to
resign for Good Reason (i) if the occurrence of the event otherwise constituting
Good Reason is the result of death, Disability, a termination by the Company
for
which proper notification has been given (and, if for Cause, opportunity
to
cure, if applicable) or a voluntary resignation (including a Retirement)
by the
Executive other than for Good Reason and (ii) unless the Executive gives
the
Company written notice of the event constituting “Good Reason” within 90 days of
the occurrence of such event and the Company fails to cure such event within
30
days after receipt of such notice.
(k) “Pro-rata
Annual Bonus” shall mean the Annual Bonus the Executive would have received had
his employment continued through the end of the fiscal year in which his
termination of employment occurs multiplied by a fraction, the numerator
of
which is the number of days during such fiscal year that the Executive is
employed by the Company and the denominator of which is 365.
(l) “Pro-rata
Supplemental Award” shall mean an amount equal to 30% of the total cash
compensation used to determine the amount of the Supplemental Award granted
immediately prior to the Date of Termination multiplied by a fraction, the
numerator of which is the number of days that the Executive is employed by
the
Company during the year in which the Date of Termination occurs and the
denominator of which is 365.
(m) “Retirement”
shall have the meaning ascribed to such term in Section 9(f) below.
(n)
“Separation From Service” shall mean a termination of the
Executive’s
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employment
in a manner consistent with Treasury Regulation Section
1.409A-1(h).
(o) “Stock
Incentive Plan” shall have the meaning ascribed to such term in Section 6(a)
below.
(p) “Supplemental
Award” shall have the meaning ascribed to such term in Section
6(b).
(q) “Target
Bonus” shall have the meaning ascribed to such term in Section 5
below.
(r) “Term”
shall have the meaning ascribed to such term in Section 2 below.
The
term of the Executive’s employment hereunder shall begin on the Effective Date
and end at the close of business on March 1, 2011; provided, however, that
the
Term shall thereafter be automatically extended for additional one-year periods,
unless either the Company or the Executive gives the other written notice
at
least 180 days prior to the then-scheduled expiration of the Term that such
Party is electing not to so extend the Term (the initial term plus any extension
thereof in accordance herewith being referred to herein as the
“Term”). Notwithstanding the foregoing, the Term shall end on the
date on which the Executive’s employment is terminated by either Party in
accordance with the provisions herein.
During
the Term, the Executive shall be employed as the President and Chief Executive
Officer of the Company and shall be responsible for the general management
of
the affairs of the Company and shall perform such other duties and
responsibilities as determined by the Board. It is also the intention
of the Parties that the Executive shall continue to be nominated as a member
of
the Board. The Executive, in carrying out his duties under this
Agreement, shall report to the Board or the Chairman of the Board as the
Board’s
designee. The Executive shall devote substantially all of his
business time and attention to the satisfactory performance of his
duties. Anything herein to the contrary notwithstanding, nothing
shall preclude the Executive from (i) subject to the reasonable approval of
the Board, serving on the boards of directors of trade associations and/or
charitable organizations or other business corporations (provided such service
is not prohibited under Section 11(a) below), (ii) engaging in charitable
activities and community affairs and (iii) managing his personal
investments and affairs, provided that the activities described in the preceding
clauses (i) through (iii) do not materially interfere with the proper
performance of his duties and responsibilities hereunder.
4. Base
Salary.
During
the Term, the Executive shall be paid an annualized Base Salary of $1,000,000,
payable in accordance with the regular payroll practices of the Company,
subject
to annual
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review
by the Board (or its designee, including the Compensation Committee of the
Board) in its (or its designee’s) sole discretion. During the Term
the Base Salary may not be decreased without the Executive’s prior written
consent. After any increase in base salary approved by the Board or
its designee, the term “Base Salary” as used in this Agreement shall thereafter
refer to such increased amount. The Executive shall not be entitled
to any compensation for service as a member of the Board or for service as
an
officer or member of any board of directors of any Affiliate.
During
the Term (including for fiscal year 2007), the Executive shall be eligible
to
receive an annual incentive award (provided the Executive was employed
continuously during the applicable fiscal year) pursuant to the Company’s
Incentive Compensation Plan, as amended (or such other annual incentive plan
as
may be approved by the Company’s shareholders), in effect for the applicable
fiscal year (“Bonus Plan”). The Executive’s annual incentive award
for fiscal year 2007 and thereafter shall have a target of 125% of Base Salary
(“Target Bonus”) with a potential maximum award of up to two (2) times the
Target Bonus, in all events based on the Executive’s achievement of annual
performance and other targets approved by the committee administering the
Bonus
Plan. The amount and payment of any Annual Bonus shall be determined
in accordance with the Bonus Plan. Any Annual Bonus shall be payable
when bonuses for the applicable performance period are paid to other senior
executives of the Company, but in all events no later than the 60th day
following the end of the applicable fiscal year for which the Annual Bonus
has
been earned. As used in this Agreement, “Annual Bonus” shall mean the
annual incentive award earned by the Executive pursuant to the Bonus Plan
for
the applicable completed performance period. After any increase in
the Executive’s target annual bonus opportunity as a percentage of Base Salary
as approved by the Board or its designee, the term “Target Bonus” as used in
this Agreement shall thereafter refer to the increased target
opportunity.
(a) During
the Term for fiscal year 2008 and thereafter, provided the Executive is employed
by the Company, the Executive shall be eligible to participate in the Company’s
2003 and 2005 Stock Incentive Plans, as amended from time to time, or such
other
long-term incentive plan(s) as may be approved by the Company’s shareholders
from time to time (“Stock Incentive Plan”), with grants under such plan(s)
having an annual grant date target value, in the aggregate, equal to no less
than 100% of total cash compensation (Base Salary plus Target
Bonus). For this purpose, Base Salary shall be the annualized rate of
salary in effect on the date of the award and Target Bonus shall be the Target
Bonus for the year in which the award is made. Awards under any Stock
Incentive Plan shall be made at such times as awards are generally made to
the
Company’s senior executives. The Board shall have the discretion to
decide the form of any equity award (whether it is awarded in restricted
stock,
stock options, other type of equity or a combination thereof). Any
stock option award shall be valued on the basis of Black-Scholes or the
valuation formula used by the Company in reporting such compensation in its
filings with the Securities and Exchange Commission. Except as
otherwise expressly provided herein, all equity grants shall be governed
by the
applicable Stock Incentive
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Plan
and/or award agreement. The Executive shall be subject to the equity
ownership, retention and other requirements applicable to senior executives
of
the Company.
(b) During
the Term for fiscal year 2008 and thereafter, provided the Executive is employed
by the Company, the Executive shall be entitled to an annual award with an
aggregate grant date value equal to 30% of the total current cash compensation
(Base Salary plus Annual Bonus) (“Supplemental Award”). For this
purpose, Base Salary shall be the Base Salary paid to the Executive for the
prior fiscal year and Annual Bonus shall be the annual bonus awarded to the
Executive by the Board for the prior fiscal year. The Supplemental
Award shall not be awarded to the Executive until after the determination
by the
Board of the Executive’s Annual Bonus for the prior fiscal year (but in no event
later than 30 days thereafter) and shall be awarded in the form of restricted
stock units (payable in shares of the Company’s common stock (“Shares”))
pursuant to the Stock Incentive Plan (“Career Units”). Any Career
Units shall be governed by the applicable Stock Incentive Plan and, if
applicable, any award agreement. For purposes of this Section 6(b),
each Career Unit shall be (i) equal to one Share and (ii) valued at the closing
price of such Share on the date that the Supplemental Award is
made. Notwithstanding anything herein to the contrary, the Executive
shall have the right to elect to receive up to 50% of any Supplemental Award
in
the form of a credit to a bookkeeping account maintained by the Company for
the
Executive’s account (the “Notional Account”) (and thus not have such amount
awarded in the form of Career Units), provided the Executive delivers to
the
Company before the close of his taxable year preceding the year in which
the
Supplemental Award is earned a written election stating the percentage of
the
Supplemental Award (up to 50%) to be credited to the Notional
Account. If the Executive makes such an election, at the time the
Supplemental Award for the year is made by the Company, the Company will
credit
the amount the Executive has elected to receive in accordance herewith to
the
Notional Account, the balance of which account shall periodically be credited
(or debited) with the deemed positive (or negative) return based on returns
of
the investment alternative or alternatives under the Company’s 401(k) plan
selected in advance (and in accordance with the applicable rules of such
plan or
investment alternative) by the Executive to apply to such Notional Account,
with
such deemed returns calculated in the same manner and at the same times as
the
return on such investment alternative(s). The Company’s obligation to
pay the amount credited to the Notional Account, including any return thereon
provided for in this Section 6(b), and to deliver Shares in respect of the
Career Units hereunder shall be an unfunded obligation to be satisfied from
the
general funds of the Company. Except as otherwise provided in Section
9 below, any Supplemental Award (whether in the form of Career Units or the
Notional Account (as adjusted for any returns thereon) (“Adjusted Notional
Account”)) granted prior to April 14, 2008 shall xxxxx xxxx 50% on April 14,
2008 and 50% on the date the Executive reaches age 65 and any Supplemental
Award
(whether in the form of Career Units or the Adjusted Notional Account) made
on
or after April 14, 2008 shall xxxxx xxxx 100% on the date the Executive reaches
age 65, provided that in both cases the Executive is employed by the Company
on
such vesting date. In addition, provided that the Executive is
employed by the Company on the relevant vesting date, any unvested Adjusted
Notional Account shall vest upon a Change in Control as defined in Section
1(g)(i) or (ii) and any unvested Career Units shall vest upon a “change in
control event” within the meaning of Section 409A of the Internal Revenue Code
of 1986, as amended from time to time (the “Code”) and the regulations
promulgated thereunder (“Section 409A”) if
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unvested
restricted stock awards granted under the Stock Incentive Plan also vest
on such
event. Finally, in the Board’s sole discretion and upon its written consent,
previously granted Supplemental Awards that remain unvested after the Executive
reaches age 62 may also vest. The vested Career Units and the vested
balance in the Adjusted Notional Account, if any, shall not be distributed
to
the Executive until there has been a Separation From Service or, if earlier,
there has been a Change in Control as defined in Section 1(g)(i) or (ii)
hereof and, at such time, shall only be distributed at the
earliest time that satisfies the requirements of this Section
6(b). Upon a Change in Control as defined in Section 1(g)(i) or (ii),
the vested Supplemental Award shall be distributed in Shares for any vested
Career Units and in a lump-sum cash payment for any vested balance in the
Adjusted Notional Account to the Executive. In addition, if the
Executive’s employment is terminated for any reason, after taking into account
Section 9 hereof, any unvested Supplemental Awards (whether in the form of
Career Units or the Adjusted Notional Account) shall be forfeited and the
vested
Supplemental Award shall be distributed in Shares for any vested Career Units
and in a lump-sum cash payment for any vested balance in the Adjusted Notional
Account to the Executive in January of the year following the year in which
the
later of the Date of Termination or the Executive’s Separation From Service
occurs; provided, however, that if the Executive is a “specified employee” as
determined pursuant to Section 409A as of the date of the Executive’s Separation
From Service, such distribution shall not be made before the first business
day
of the seventh calendar month following the month in which the Executive’s
Separation From Service occurs. For purposes of Section 409A, the
vested balance in the Adjusted Notional Account shall be deemed to be a payment
separate and distinct from the vested Career Units. In addition, the
Executive can elect to delay the time of any payment under this Section 6(b),
or
change the form of payment for the Adjusted Notional Account, provided such
election is delivered to the Company in writing at least 12 months before
the
scheduled payment date for such payment and the new payment date for such
payment is not earlier than (i) the Executive’s death, (ii) the
Executive’s “disability” which satisfies the requirements of Section
409A(a)(2)(C) of the Code and its implementing regulations, or (iii) five
(5)
years from the originally scheduled payment date. The Parties
acknowledge that pursuant to the employment agreement between the Parties
dated
as of December 22, 2004 (the “Prior Employment Agreement”), the Executive was
awarded Supplemental Awards pursuant to Section 6(b) of the Prior Employment
Agreement and such Supplemental Awards (including any Career Units or Adjusted
Notional Account) shall be treated in accordance with Section 6(b) and the
applicable provisions of Section 9 of this Agreement as if they had been
granted
hereunder. Upon the expiration or termination of the Term, the
vesting and payment dates in this Section 6(b) (without regard to Section
9,
except as otherwise expressly provided in Section 9(d) of this Agreement)
and
the election right in this Section 6(b) shall continue to apply to any
outstanding Supplemental Award.
During
the Term, subject to the Company’s right to amend, modify or terminate any
benefit plan or program, the Executive shall be entitled to participate in
all
employee savings and welfare benefit plans and programs made available to
the
Company’s senior-level executives on a basis no less favorable than provided to
other similarly-situated executives, as such plans or programs may be in
effect
from time to time, including, without limitation, savings and other retirement
plans or programs, medical, dental, hospitalization, short-term and
long-term
8
disability
and life insurance plans, accidental death and dismemberment protection and
travel accident insurance. Notwithstanding the foregoing, the
Executive’s eligibility for and/or participation in any supplemental retirement
plan or program, including, but not limited to, any excess benefit plan,
shall
be at the sole discretion of the Board. During the Term, the
Executive shall also be entitled to an annual Company-paid physical medical
exam
and Company-paid term life insurance with a benefit equal to $2 million,
provided the Company can obtain such insurance at commercially reasonable
premium levels.
(a) During
the Term, the Executive is authorized to incur reasonable expenses in carrying
out his duties and responsibilities under this Agreement and the Company
shall
promptly reimburse him for all business and entertainment expenses incurred
in
connection with carrying out the business of the Company, subject to
documentation in accordance with the Company’s policy. The Executive
shall be entitled to first class air travel when traveling on Company
business.
(b) The
Executive shall be entitled to perquisites provided to other senior-level
executives, including a monthly car allowance of up to a maximum of
$1,500.
(c) The
Executive shall be entitled to four weeks paid vacation per calendar
year.
Notwithstanding
anything elsewhere to the contrary, except to the extent any reimbursement,
payment or entitlement pursuant to Section 7 or Section 8 hereof does not
constitute a “deferral of compensation” within the meaning of Section 409A, (i)
the amount of expenses eligible for reimbursement or the provision of any
in-kind benefit (as defined in Section 409A) to the Executive during any
calendar year will not affect the amount of expenses eligible for reimbursement
or provided as in-kind benefits to the Executive in any other calendar year,
(ii) the reimbursements for expenses for which the Executive is entitled
shall be made on or before the last day of the calendar year following the
calendar year in which the applicable expense is incurred and (iii) the right
to
payment or reimbursement or in-kind benefits may not be liquidated or exchanged
for any other benefit.
(a) Termination
Without Cause by the Company or Resignation for Good Reason by the
Executive. In the event that during the Term the Executive’s
employment is terminated without Cause by the Company (other than upon death
or
due to Disability) or the Executive resigns for Good Reason (which, for the
avoidance of doubt, shall not include a termination described in clause (i)
of
the last sentence of Section 1(j) above) and Section 9(d) below does not
apply,
the Executive shall be entitled to:
(i) an
amount equal to one and a half (1.5) times the sum of (a) Base Salary plus
(b)
Target Bonus, payable in a cash lump sum as soon as practicable following
the
Date of Termination (but in no event later than
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60
days following such date);
(ii) a
Pro-rata Annual Bonus, payable in a cash lump sum as soon as practicable
following the Date of Termination but in no event earlier than January 1st or later
than March
15th of the
Executive’s taxable year following the taxable year in which the Date of
Termination occurs;
(iii) immediate
vesting as of the Date of Termination of 50% of any restricted stock that
remains unvested as of the Date of Termination and continued exercisability
of
any outstanding stock options that have vested as of the Date of Termination
for
two years following the Date of Termination or the remainder of the option
term,
if shorter;
(iv) immediate
vesting as of the Date of Termination of 50% of any previously granted Career
Units which would have vested on the next scheduled vesting date (i.e.,
either on April 14, 2008 or when the Executive reaches age 65) if the Executive
had remained employed by the Company through such vesting date, with any
vested
Career Units payable in accordance with Section 6(b) above;
(v) if
the Date of Termination is prior to April 14, 2008, immediate vesting as
of the
Date of Termination of 25% of the account balance in the Adjusted Notional
Account, and if the Date of Termination is on or after April 14, 2008 but
before
the Executive’s 65th birthday,
immediate
vesting as of the Date of Termination of a pro-rata portion of the unvested
account balance in the Adjusted Notional Account (determined by multiplying
the
unvested adjusted balance by a fraction, the numerator of which is the number
of
days the Executive was employed by the Company from April 14, 2008 to the
Date
of Termination and the denominator of which is 1262), with any vested balance
payable in accordance with Section 6(b) above; and
(vi) continued
participation for the Executive and his eligible dependents in the Company’s
welfare benefit plans in which he and his eligible dependents were participating
immediately prior to the Date of Termination until the earlier of (a) the
18th month
anniversary of the Date of Termination or (b) the date, or dates, the Executive
receives equivalent coverage under the plans and programs of a subsequent
employer.
(b) Termination
upon Death or due to Disability. In the event that during the
Term the Executive’s employment is terminated upon death or due to Disability,
the Executive (or his estate or legal representative, as the case may be)
shall
be entitled to:
(i) a
Pro-rata Annual Bonus, payable in a cash lump sum as soon as practicable
following the Date of Termination but in no event earlier than January 1st or later
than March
15th of the
Executive’s taxable year
10
following
the taxable year in which the Date of Termination occurs;
(ii) a
Pro-rata Supplemental Award, payable in a cash lump sum as soon as practicable
following the Date of Termination (but in no event later than 60 days following
such date);
(iii) immediate
vesting as of the Date of Termination of all outstanding equity awards (other
than Career Units), with any vested stock options remaining exercisable for
two
years following the Date of Termination or the remainder of the option term,
if
shorter; and
(iv) immediate
vesting as of the Date of Termination of any previously granted Supplemental
Award, payable in accordance with Section 6(b) above.
(c) Termination
by the Company for Cause or a Voluntary Resignation by the
Executive. In the event that during the Term the Company
terminates the Executive’s employment for Cause or the Executive voluntarily
resigns other than upon Retirement, the Executive shall be entitled to any
vested Supplemental Award, payable in accordance with Section 6(b)
above. Any restricted stock, stock options, Career Units and other
equity awards as well as any account balance in the Adjusted Notional Account
that remain unvested as of the Date of Termination shall be
forfeited. A voluntary resignation by the Executive of his employment
shall be effective upon 90 days prior written notice by the Executive to
the
Company, subject to earlier termination by the Company (without affecting
the
status of such termination as a voluntary resignation) as provided in Section
1(h)(ii) above, and, provided such notice is given by the Executive, shall
not
be deemed a breach of this Agreement.
(d) Termination
without Cause by the Company or Resignation for Good Reason by the Executive
in
Connection with a Change in Control. In the event that during the
Term, (i) the Executive’s employment is terminated without Cause by the Company
(other than upon death or due to Disability) or the Executive resigns for
Good
Reason (which, for the avoidance of doubt, shall not include a termination
described in clause (i) of the last sentence of Section 1(j) above), in both
cases upon or within one year following a Change in Control (provided the
Term
is still in effect or has expired during this one-year period) or (ii) the
Executive’s employment is terminated without Cause by the Company within 90 days
prior to a Change in Control (provided the Term is still in effect or has
expired during this 90-day period) and such termination is in connection
with,
or in anticipation of, the Change in Control, the Executive shall be entitled
to:
(i) an
amount equal to three (3) times the sum of (a) Base Salary plus (b) Target
Bonus, payable in a cash lump sum as soon as practicable following the Date
of
Termination (but in no event later than 60 days following such
date);
(ii) a
Pro-rata Annual Bonus, payable in a cash lump sum as soon as practicable
following the Date of Termination but in no event earlier than
11
January
1st or later
than March 15th
of the Executive’s taxable year following the taxable year in which the Date of
Termination occurs;
(iii) an
amount equal to 90% of the total cash compensation used to determine the
value
of the Supplemental Award granted immediately prior to the Date of Termination,
payable in a lump sum as soon as practicable following the Date of Termination
(but in no event later than 60 days following such date);
(iv) immediate
vesting as of the Date of Termination of all outstanding equity awards (other
than Career Units), with vested stock options remaining exercisable for the
remainder of their original terms;
(v) immediate
vesting as of the Date of Termination of any previously granted Supplemental
Award, payable in accordance with Section 6(b) above; and
(vi) continued
participation for the Executive and his eligible dependents in the Company’s
welfare benefit plans in which he and his eligible dependents were participating
immediately prior to the Date of Termination until the earlier of (a) 36
months
following the Date of Termination, or (b) the date, or dates, the Executive
receives substantially equivalent coverage under the plans and programs of
a
subsequent employer.
For
purposes of the payment date in clause (iii), and the vesting dates in clauses
(iv) and (v), of this Section 9(d), the “Date of Termination” shall mean the
actual Date of Termination or the date of the Change in Control, whichever
is
later. In addition, if the Executive’s employment is terminated
without Cause by the Company within 90 days prior to a Change in Control
(provided the Term is still in effect or has expired during this 90-day period),
such termination is in connection with, or in anticipation of, the Change
in
Control and the Date of Termination is prior to the date the Change in Control
occurs, then: (1) the payments under clause (i) of this Section 9(d) shall
be
paid to the Executive as follows: an amount equal to one and a half
(1.5) times the sum of (a) Base Salary plus (b) Target Bonus, payable in
a cash
lump sum as soon as practicable following the Date of Termination (but in
no
event later than 60 days following such date) and an amount equal to one
and a
half (1.5) times the sum of (a) Base Salary plus (b) Target Bonus, payable
in a
cash lump sum on the later of the date the Change in Control occurs or the
60th day
following the Date of Termination; and (2) as of the Date of Termination,
the
Executive shall also be entitled to the treatment of his equity and Supplemental
Awards in accordance with clauses (iii), (iv) and (v) of Section 9(a), with
any
additional vesting under clauses (iv) and (v) of this Section 9(d) occurring
on
the date of the Change in Control.
(e) Termination
of the Executive’s Employment by the Company Upon the Expiration of the
Term. If the Company provides written notice to the Executive in
accordance with Section 2 above that the Term shall not renew and upon such
expiration of the Term the Company terminates the Executive’s employment under
circumstances that during the Term
12
would
constitute a termination of employment without Cause, the Executive shall
be
entitled to the same payments, benefits and entitlements as a Termination
without Cause under Section 9(a) hereof; provided if such termination occurs
on
or within one year following a Change in Control, the Executive shall be
entitled to the payments, benefits and entitlements under Section 9(d)
hereof.
(f) Termination
of the Executive’s Employment Upon Retirement. In the event that
during the Term the Executive’s employment terminates by reason of Retirement
(as defined below), the Executive shall be entitled to:
(i) continued
vesting for stock options granted to the Executive on or after the Effective
Date as if the Executive had remained an active employee of the Company through
the applicable vesting date, with any stock options granted after the Effective
Date which are exercisable as of the Date of Termination remaining exercisable
until the earlier of the one year anniversary of the Date of Termination
or the
original expiration date for such options and any stock options vesting pursuant
to this clause (i) remaining exercisable until the earlier of the one year
anniversary of the date such stock options vest or the original expiration
date
for such options;
(ii) in
the event that on the Date of Termination less than a majority of the members
of
the Board are members who were members of the Board on the Effective Date
and
provided that the Board has not already exercised its discretion to accelerate
vesting of such Supplemental Awards and/or restricted stock, (1) the account
balance in the Adjusted Notional Account shall immediately vest and be paid
out
in accordance with Section 6(b) above and (2) any outstanding restricted
stock
and any Career Units granted to the Executive on or after the Effective Date
will immediately vest as of the Date of Termination, with the Career Units
payable in accordance with Section 6(b) above, provided that except to the
extent necessary to pay any taxes on the vesting of such shares or Career
Units,
the Executive shall be restricted from selling such shares until the date
such
restricted stock or Career Units would have vested absent the application
of
this Section 9(f)(ii); and
(iii) any
Supplemental Award vested as of the Date of Termination, payable in accordance
with Section 6(b) above.
For
purposes of this Agreement, Retirement shall be any voluntary termination
of the
Executive’s employment on or after he reaches age 63 (other than on account of
Good Reason, death or Disability). A Retirement by the Executive
shall be effective upon 90 days prior written notice by the Executive to
the
Company.
(g) Other
Entitlements Upon Termination of Employment. In the event of any
termination of the Executive’s employment, the Executive (or his estate or legal
representative,
13
as
the case may be) shall be entitled to:
(i) Base
Salary through the Date of Termination, payable on the first regularly scheduled
payroll date following the Date of Termination;
(ii) except
for a termination of employment pursuant to Section 9(c) above, payment of
any
unpaid Annual Bonus for any fiscal year preceding the Date of Termination,
payable when bonuses for such fiscal year are paid to other Company
executives;
(iii) any
amounts earned or owing to the Executive but not yet paid under Section 8
above,
payable in accordance with such section; and
(iv) except
as otherwise provided in Section 9(h) below, additional entitlements, if
any, in
accordance with applicable plans and programs of the Company (provided that
in
no event shall the Executive be entitled to duplication of any payments or
benefits).
(h) Exclusivity
of Benefits; Releases of Claims. Any payments provided pursuant
to Section 9(a), Section 9(d) or Section 9(e) above shall be in lieu of any
salary continuation arrangements under any other severance program of the
Company. In order to be entitled to the payments, rights and other
entitlements in Section 9(a), Section 9(b) (but only in the event of a
termination for Disability and, in this event, only as a condition for the
Pro-rata Supplemental Award in Section 9(b)(ii) and the vesting of the
Supplemental Award in Section 9(b)(iv)), Section 9(d), Section 9(e) or Section
9(f) (but only in the case of clauses (i) and (ii) of such Section 9(f))
above,
the Executive shall be required to execute and deliver a release of claims
against the Company in the form of Exhibit A attached hereto no later than
45
days following the Date of Termination and not revoke such release within
the
applicable revocation period. Upon the execution by the Executive and
delivery to the Company of such release of claims (provided the Executive
does
not revoke such release within the applicable revocation period), the Company
agrees to execute a release of claims against the Executive in the form of
Exhibit B attached hereto and to deliver such release to the Executive.
(i) Nature
of Payments. Any amounts due under this Section 9 are in the
nature of severance payments considered to be reasonable by the Company and
are
not in the nature of a penalty.
(j) No
Mitigation; No Offset. In the event of termination of his
employment for any reason, the Executive shall be under no obligation to
seek
other employment and, except as specifically provided for in this Section
9,
there shall be no offset against amounts due to him on account of any
remuneration or benefits provided by any subsequent employment he may
obtain.
(k) Resignation. Notwithstanding
any other provision of this Agreement, upon the termination of the Executive’s
employment for any reason, unless otherwise requested by the Board, he shall
immediately resign from the Board, from all boards of directors of
any
14
Affiliate
of the Company of which he may be a member, and as a trustee of, or fiduciary
to, any employee benefit plans of the Company or any Affiliate. The
Executive hereby agrees to execute any and all documentation of such
resignations upon request by the Company, but he shall be treated for all
purposes as having so resigned upon termination of his employment, regardless
of
when or whether he executes any such documentation.
(l) Section
409A. Notwithstanding anything to the contrary in this Agreement
or elsewhere (except for Section 6(b) of this Agreement), if the Executive
is a
“specified employee” as determined pursuant to Section 409A as of the date of
the Separation From Service and if any payment, benefit or entitlement provided
for in this Agreement or otherwise both (x) constitutes a “deferral of
compensation” within the meaning of Section 409A and (y) cannot be paid or
provided in a manner otherwise provided herein or otherwise without subjecting
the Executive to additional tax, interest or penalties under Section 409A,
then
any such payment, benefit or entitlement that is payable during the first
six
months following the Executive’s Separation From Service shall be paid or
provided to the Executive in a cash lump-sum on the earlier of the Executive’s
death or the first business day of the seventh calendar month following the
month in which the Executive’s Separation From Service occurs. In
addition, any payment, benefit or entitlement due upon a termination of the
Executive’s employment that represents a “deferral of compensation” within the
meaning of Section 409A (other than any payments due pursuant to Section
6(b) of
this Agreement) shall only be paid or provided to Executive upon a Separation
From Service, in which case any reference to “Date of Termination” in connection
with such payment, benefit or entitlement shall be deemed to be a reference
to
“Separation From Service”, and the actual payment date within the time specified
in the applicable provision of Section 9 shall be within the Company’s sole
discretion. Notwithstanding anything to the contrary in this Section
9 or otherwise, any payment or benefit under this Section 9 or otherwise
which
is exempt from Section 409A pursuant to Treasury Regulation Section
1.409A-1(b)(9)(v)(A) or (C) shall be paid or provided to the Executive only
to
the extent the expenses are not incurred or the benefits are not provided
beyond
the last day of the second taxable year of the Executive following the taxable
year of the Executive in which the Separation From Service occurs; and provided
further that the Company reimburses such expenses no later than the last
day of
the third taxable year following the taxable year of the Executive in which
the
Separation From Service occurs. Finally, to the extent
that the provision of any benefit pursuant to Section 9(a)(vi) or Section
9(d)(vi) hereof is taxable to the Executive, any such reimbursement shall
be
paid to the Executive on or before the last day of the Executive’s taxable year
following the taxable year in which the expense is incurred and such
reimbursement shall not be subject to liquidation or exchange for any other
benefit.
(a) During
the Term and thereafter, other than in the ordinary course of performing
his
duties for the Company or as required in connection with providing any
cooperation to the Company pursuant to Section 13 below, the Executive agrees
that he shall not disclose to anyone or make use of any trade secret or
proprietary or confidential information of the Company or any Affiliate of
the
Company, including such trade secret or proprietary or confidential information
of any customer or other entity to which the Company owes an obligation not
to
disclose such information, which he acquires during the course of
his
15
employment
(“Confidential Information”), including, but not limited to, records kept in the
ordinary course of business, except when required to do so by a court of law, by
any governmental agency having supervisory authority over the business of
the
Company or by any administrative or legislative body (including a committee
thereof) with apparent or actual jurisdiction to order him to divulge, disclose
or make accessible such information. “Confidential Information” shall
not include information that (i) was known to the public prior to its
disclosure by the Executive; or (ii) becomes known to the public through no
wrongful disclosure by or act of the Executive or any representative of the
Executive. In the event the Executive is requested by subpoena, court
order, investigative demand, search warrant or other legal process to disclose
any Confidential Information, the Executive agrees, unless prohibited by
law or
Securities and Exchange Commission regulation, to give the Company’s General
Counsel prompt written notice of any request for disclosure in advance of
the
Executive’s making such disclosure and the Executive agrees not to disclose such
information unless and until the Company has expressly authorized the Executive
to do so in writing or the Company has had a reasonable opportunity to object
to
such request or to litigate the matter (of which the Company agrees to keep
the
Executive reasonably informed) and has failed to do so.
(b) The
Executive hereby sells, assigns and transfers to the Company all of his right,
title and interest in and to all inventions, discoveries, improvements and
copyrightable subject matter (the “Rights”) which during the period of his
employment are made or conceived by him, alone or with others, and which
are
within or arise out of any general field of the Company’s business or arise out
of any work he performs, or information he receives regarding the business
of
the Company, while employed by the Company. The Executive shall fully
disclose to the Company as promptly as available all information known or
possessed by him concerning any Rights, and upon request by the Company and
without any further remuneration in any form to him by the Company, but at
the
expense of the Company, execute all applications for patents and for copyright
registration, assignments thereof and other instruments and do all things
which
the Company may deem necessary to vest and maintain in it the entire right,
title and interest in and to all such Rights.
(c) The
Executive agrees that at the time of the termination of his employment (whether
during or after the expiration of the Term), whether at the instance of the
Executive or the Company, and regardless of the reasons therefor, he will
promptly deliver to the Company’s General Counsel, and not keep or deliver to
anyone else, any and all of the following which is in his possession or control:
(i) Company property (including, without limitation, credit cards, computers,
communication devices, home office equipment and other Company tangible
property) and (ii) notes, files, memoranda, papers and, in general, any and
all
physical matter and computer files containing confidential or proprietary
information of the Company or any of its Affiliates, including any and all
documents relating to the conduct of the business of the Company or any of
its
Affiliates and any and all documents containing confidential or proprietary
information of the customers of the Company or any of its Affiliates, except
for
(x) any documents for which the Company’s General Counsel has given written
consent to removal at the time of termination of the Executive’s employment and
(y) any information necessary for the Executive to retain for his tax purposes
(provided the Executive maintains the confidentiality of such information
in
accordance with Section 10(a) above).
16
(a) The
Executive acknowledges that in his capacity in management the Executive has
had
or will have a great deal of exposure and access to the Company’s trade secrets
and confidential and proprietary information. Therefore, during the
Term and thereafter (provided the Executive is employed by the Company) and
for
12 months (24 months in the case of the Executive’s Retirement) following the
Executive’s termination of employment (whether during or after the expiration of
the Term) to protect the Company’s trade secrets and other confidential and
proprietary information, the Executive agrees that he shall not, other than
in
the ordinary course of performing his duties hereunder or as agreed by the
Company in writing, engage in a “Competitive Business,” directly or indirectly,
as an individual, partner, shareholder, director, officer, principal, agent,
employee, trustee, consultant, or in any relationship or capacity, in any
geographic location in which the Company or any of its Affiliates is engaged
in
business. The Executive shall not be deemed to be in violation of
this Section 11(a) by reason of the fact that he owns or acquires, solely
as an
investment, up to two percent (2%) of the outstanding equity securities
(measured by value) of any entity. “Competitive Business” shall mean
a business engaged in (x) apparel design and/or apparel wholesaling or (y)
retailing in competition with any business that the Company is conducting
at the
time of the alleged violation.
(b) The
Executive agrees that for a period of 18 months (24 months in the case of
the
Executive’s Retirement) following the Executive’s termination of employment
(whether during or after the expiration of the Term), he will not, without
the
prior written consent of the Company, directly or indirectly, hire any employee
of the Company or any of its Affiliates, or solicit or encourage any such
employee to leave the employ of the Company or its Affiliates, as the case
may
be.
(c) The
Executive agrees that for a period of 18 months (24 months in the case of
the
Executive’s Retirement) following the Executive’s termination of employment
(whether during or after the expiration of the Term), he will not, without
the
prior written consent of the Company, directly or indirectly, solicit or
encourage any customer of the Company or any of its Affiliates to reduce
or
cease its business with the Company or any such Affiliate or otherwise interfere
with the relationship of the Company or any Affiliate with its
customers.
(d) The
Executive and the Company each agree to refrain from making any statements
or
comments, whether oral or written, of a defamatory or disparaging nature
to
third parties regarding each other (and, in the case of the Executive’s
commitment hereunder, the “Company” shall include an Affiliate of the Company
and the Company’s officers, directors, personnel and products). The
Executive and the Company each understand that either party should be entitled
to respond truthfully and accurately to statements about such party made
publicly by the Executive or the Company, as the case may be, provided that
such
response is consistent with the responding party’s obligations not to make any
statements or comments of a defamatory or disparaging nature as set forth
herein.
The
Executive expressly agrees and acknowledges any breach or threatened breach
of
any
17
obligation
under Section 10 or Section 11 above will cause the Company immeasurable
and
irreparable harm for which there is no adequate remedy at law, and as a result
of this the Company shall be entitled to seek the issuance by a court of
competent jurisdiction of an injunction, restraining order or other equitable
relief in favor of itself, without the necessity of posting a bond, restraining
the Executive from committing or continuing to commit any such
violation. Any payment, benefit of entitlement due to the Executive
under this Agreement shall be subject to forfeiture if the Executive materially
breaches any provision of Section 10, Section 11 or Section 13 of this
Agreement.
13. Cooperation.
Following
the Executive’s termination of employment (whether during or after the
expiration of the Term), upon reasonable request by the Company, the Executive
shall cooperate with the Company or any of its Affiliates with respect to
any
legal or investigatory proceeding, including any government or regulatory
investigation, or any litigation or other dispute relating to any matter
in
which he was involved or had knowledge during his employment with the Company,
subject to his reasonable personal and business schedules. The
Company shall reimburse the Executive for all reasonable out-of-pocket costs,
such as travel, hotel and meal expenses and reasonable attorneys’ fees, incurred
by the Executive in providing any cooperation pursuant to this Section 13;
provided such expenses shall be paid to the Executive as soon as practicable
but
in no event later than the end of the calendar year following the calendar
year
in which the expenses are incurred, subject in all cases to the Executive
providing appropriate documentation to the Company. The Company shall
also pay the Executive a reasonable per diem amount for the Executive’s time
(other than for time spent preparing for or providing testimony) which shall
be
based upon the Executive’s Base Salary at the Date of Termination, with such per
diem paid to the Executive in the calendar month following the month in which
he
provides such assistance. Any reimbursement or payment under this
Section 13 shall not affect the amount of the reimbursement or payment to
the
Executive in any other taxable year. The right to payment or
reimbursement pursuant to this Section 13 shall not be liquidated or exchanged
for any other benefit.
14. Tax
Matters.
(a) If
any amount, entitlement, or benefit paid or payable to the Executive or provided
for his benefit under this Agreement and under any other agreement, plan
or
program of the Company (such payments, entitlements and benefits referred
to as
a “Payment”) is subject to the excise tax imposed under Section 4999 of the Code
or any similar federal or state law (an “Excise Tax”), then notwithstanding
anything contained in this Agreement to the contrary, to the extent that
any or
all Payments would be subject to the imposition of an Excise Tax, the Payments
shall be reduced (but not below zero) if and to the extent that such reduction
would result in the Executive retaining a larger amount, on an after-tax
basis
(taking into account federal, state and local income taxes and the imposition
of
the Excise Tax), than if the Executive received all of the Payments (such
reduced amount is hereinafter referred to as the “Limited Payment
Amount”). The Company shall reduce or eliminate the Payments, by
first reducing or eliminating those payments or benefits which are payable
in
cash and then by reducing or eliminating non-cash payments, in each case
in
reverse order beginning with payments or
18
benefits
which are to be paid the farthest in time from the Determination (as defined
below). Any notice given by the Executive pursuant to the preceding
sentence shall take precedence over the provisions of any other plan,
arrangement or agreement, including, but not limited to, the other provisions
of
this Agreement, governing the Executive’s rights and entitlements to any
compensation, entitlement or benefit.
(b) All
calculations under this Section 14 shall be made by a nationally recognized
accounting firm designated by the Company and reasonably acceptable to the
Executive (other than the accounting firm that is regularly engaged by any
party
who has effectuated a Change in Control) (the “Accounting Firm”). The
Company shall pay all fees and expenses of such Accounting Firm. The
Accounting Firm shall provide its calculations, together with detailed
supporting documentation, both to the Company and the Executive within 45
days
after the Change in Control or the Date of Termination, whichever is later
(or
such earlier time as is requested by the Company) and, with respect to the
Limited Payment Amount, shall deliver its opinion to the Executive that he
is
not required to report any Excise Tax on his federal income tax return with
respect to the Limited Payment Amount (collectively, the
“Determination”). Within 5 days of the Executive’s receipt of the
Determination, the Executive shall have the right to dispute the Determination
(the “Dispute”). The existence of the Dispute shall not in any way
affect the right of the Executive to receive the Payments in accordance with
the
Determination. If there is no Dispute, the Determination by the
Accounting Firm shall be final binding and conclusive upon the Company and
the
Executive (except as provided in subsection (c) below).
(c) If,
after the Payments have been made to the Executive, it is established that
the
Payments made to, or provided for the benefit of, the Executive exceed the
limitations provided in subsection (a) above (an “Excess Payment”) or are less
than such limitations (an “Underpayment”), as the case may be, then the
provisions of this subsection (c) shall apply. If it is established
pursuant to a final determination of a court or an Internal Revenue Service
(the
“IRS”) proceeding which has been finally and conclusively resolved, that an
Excess Payment has been made, the Executive shall repay the Excess Payment
to
the Company within 20 days following the determination of such Excess
Payment. In the event that it is determined by (i) the Accounting
Firm, the Company (which shall include the position taken by the Company,
or
together with its consolidated group, on its federal income tax return) or
the
IRS, (ii) pursuant to a determination by a court, or (iii) upon the resolution
to the satisfaction of the Executive of the Dispute, that an Underpayment
has
occurred, the Company shall pay an amount equal to the Underpayment to the
Executive within 10 days of such determination or resolution together with
interest on such amount at the applicable federal short-term rate, as defined
under Section 1274(d) of the Code and as in effect on the first date that
such
amount should have been paid to the Executive under this Agreement, from
such
date until the date that such Underpayment is made to the
Executive.
(a) The
Executive represents and warrants that he has the free and unfettered right
to
enter into this Agreement and to perform his obligations under it and that
he
knows of no agreement between him and any other person, firm or organization,
or
any law or regulation, that would be violated by the performance of his
obligations under this Agreement. The Executive
19
agrees
that he will not use or disclose any confidential or proprietary information
of
any prior employer in the course of performing his duties for the Company
or any
of its Affiliates.
(b) The
Company represents that (i) the execution of this Agreement and the granting
of
the benefits and awards hereunder have been authorized by the Company,
including, where necessary, by the Board, (ii) the execution, delivery and
performance of this Agreement does not violate any law, regulation, order,
decree, agreement, plan or corporate governance document of the Company and
(iii) upon the execution and delivery of this Agreement by the Parties, it
shall
be the valid and binding obligation of the Company enforceable against it
in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally.
This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors, heirs (in the case of the Executive) and
assigns. For purposes of this Section 16, a successor to the Company
shall be limited to an entity which shall have acquired all or substantially
all
of the business and/or assets of the Company and shall have assumed (whether
by
agreement or operation of law) the Company’s rights and obligations under this
Agreement. No rights or obligations of the Executive under this
Agreement may be assigned or transferred by the Executive other than his
rights
to compensation and benefits, which may be transferred only by will, operation
of law or in accordance with Section 22 below.
This
Agreement contains the entire understanding and agreement between the Parties
concerning the subject matter hereof and, as of the Effective Date, shall
supersede all prior agreements, understandings, discussions, negotiations
and
undertakings, whether written or oral, between the Parties with respect thereto
(including the Prior Employment Agreement as well as the employment agreement
between the Parties dated as of April 14, 2003 but not including any equity
awards or related equity agreements which remain outstanding as of the Effective
Date).
No
provision of this Agreement may be amended unless such amendment is agreed
to in
writing and signed by the Executive and an authorized officer of the
Company. Notwithstanding the foregoing, the Company agrees to
cooperate and work in good faith to amend this Agreement prior to January
1,
2009 to comply with Section 409A if such amendment is in the reasonable opinion
of the Executive’s counsel required to prevent the Executive from incurring any
additional tax, interest or penalties under Section 409A. No waiver
by either Party of any breach by the other Party of any condition or provision
contained in this Agreement to be performed by such other Party shall be
deemed
a waiver of a similar or dissimilar condition or provision at the same or
any
prior or subsequent time. Any waiver must be in writing and signed by
the Party against whom it is being enforced (either the Executive or an
authorized officer of the Company, as the case may be).
20
19. Severability.
In
the event that any provision or portion of this Agreement shall be determined
to
be invalid or unenforceable by an arbitrator or court of competent jurisdiction
for any reason, in whole or in part, the remaining provisions of this Agreement
shall be unaffected thereby and shall remain in full force and effect to
the
fullest extent permitted by law.
21
20. Survivorship.
The
respective rights and obligations of the Parties hereunder, including, without
limitation, Section 6(b), Section 9 (termination of employment), Section
10
(confidentiality; assignment of rights; return of Company property), Section
11
(non-competition; non-solicitation; non-disparagement), Section 12 (injunctive
and other relief), Section 13 (cooperation), Section 14 (tax matters), Section
21 (indemnification and liability insurance) and Section 24 (resolution of
disputes), shall survive any expiration of the Term, including expiration
thereof upon the Executive’s termination of employment for whatever reason, to
the extent necessary to the intended preservation of such rights and
obligations.
The
Company hereby agrees during, and after termination of, his employment to
indemnify the Executive and hold him harmless, both during the Term and
thereafter, to the fullest extent permitted by law and under the certificate
of
incorporation and by-laws of the Company against and in respect of any and
all
actions, suits, proceedings, claims, demands, judgments, costs, expenses
(including reasonable attorneys’ fees), losses, amounts paid in settlement to
the extent approved by the Company, and damages resulting from the Executive’s
good faith performance of his duties as an officer or director of the Company
or
any Affiliate of the Company. The Company shall reimburse the
Executive for expenses incurred by him in connection with any proceeding
hereunder upon written request from the Executive for such reimbursement
and the
submission by the Executive of the appropriate documentation associated with
these expenses. Such request shall include an undertaking by the
Executive to repay the amount of such advance or reimbursement if it shall
ultimately be determined that he is not entitled to be indemnified hereunder
against such costs and expenses. The Company shall use commercially
reasonable efforts to obtain and maintain directors’ and officers’ liability
insurance covering the Executive to the same extent as the Company covers
its
other officers and directors.
The
Executive shall be entitled, to the extent permitted under applicable plans,
agreements or law, to select and change a beneficiary or beneficiaries to
receive any compensation or benefit payable hereunder following the Executive’s
death by giving the Company written notice thereof. In the event of
the Executive’s death or a judicial determination of his incompetence, reference
in this Agreement to the Executive shall be deemed, where appropriate, to
refer
to his beneficiary, estate or other legal representative.
23. Governing
Law.
This
Agreement shall be governed by and construed and interpreted in accordance
with
the laws of New York without reference to principles of conflicts of law,
provided, however, that Federal law shall apply to the interpretation or
enforcement of Section 24 below.
22
Except
as otherwise provided in Section 12 above, any controversy, dispute or claim
arising under or relating to this Agreement, the Executive’s employment with the
Company or any Affiliate or the termination thereof shall, at the election
of
the Executive or the Company (unless otherwise provided in an applicable
Company
plan, program or agreement), be resolved by confidential, binding and final
arbitration, to be held in the borough of Manhattan in New York City in
accordance with the rules and procedures of the Commercial Arbitration Rules
of
the American Arbitration Association. Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof and shall be binding upon the Parties. The Executive consents
to the personal jurisdiction of the Courts of the State of New York (including
the United States District Court for the Southern District of New York) in
any
proceedings for equitable relief. The Executive further agrees not to
interpose any objection for improper venue in any such
proceeding. Each Party shall be responsible for its own costs and
expenses, including attorneys’ fees, and neither Party shall be liable for
punitive or exemplary damages, provided that if the Executive substantially
prevails with respect to all claims that are the subject matter of the dispute,
his costs, including reasonable attorneys’ fees, shall be borne by the Company;
provided that if such costs are not reimbursed in connection with a dispute
exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(11)
then such payment shall be made by the Company to the Executive in the year
following the year in which the dispute is resolved.
25. Notices.
Any
notice given to a Party shall be in writing and shall be deemed to have been
given (i) when delivered personally (provided that a written
acknowledgement of receipt is obtained), (ii) three days after being sent
by certified or registered mail, postage prepaid, return receipt requested
or
(iii) two days after being sent by overnight courier (provided that a written
acknowledgement of receipt is obtained by the overnight courier), with any
such
notice duly addressed to the Party concerned at the address indicated below
or
to such other address as such Party may subsequently designate by written
notice
in accordance with this Section 25:
If
to the Company:
|
The
Warnaco Group, Inc.
|
|
000
Xxxxxxx Xxxxxx
|
||
Xxx
Xxxx, Xxx Xxxx 00000
|
||
Attention: General
Counsel
|
||
If
to the Executive:
|
The
most recent address in the Company’s
records.
|
26. Withholdings.
The
Company may withhold from any amounts payable under this Agreement such Federal,
state, local or other taxes as shall be required to be withheld pursuant
to any
applicable law or regulation.
23
27. Headings.
The
headings of the sections contained in this Agreement are for convenience
only
and shall not be deemed to control or affect the meaning or construction
of any
provision of this Agreement.
28. Counterparts.
This
Agreement may be executed in two or more counterparts.
24
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.
THE
WARNACO GROUP, INC.
|
||||
By:
|
/s/
Xxx X. Xxxxxxxx
|
|||
Name:
|
Xxx
X. Xxxxxxxx
|
|||
Title:
|
Senior
Vice President – Corporate Development,
|
|||
General
Counsel and Secretary
|
||||
THE
EXECUTIVE
|
||||
/s/
Xxxxxx X. Xxxxxx
|
||||
Xxxxxx
X. Xxxxxx
|
25
Exhibit
A
AGREEMENT
AND RELEASE OF CLAIMS
THIS
AGREEMENT AND RELEASE is executed by XXXXXX X. XXXXXX (the “Executive”) as of
the date of this Agreement and Release.
WHEREAS,
the Executive and The Warnaco Group, Inc. (the “Company”) entered into an
employment agreement dated December 19, 2007, as amended from time to time
(the
“Employment Agreement”);
WHEREAS,
the Executive has certain entitlements pursuant to the Employment Agreement
subject to the Executive’s executing this Agreement and Release.
The
Executive, on behalf of himself and his dependents, heirs, administrators,
agents, executors, successors and assigns (the “Executive Releasors”), hereby
releases and forever discharges the Company and its affiliated companies
and
their past and present parents, subsidiaries, successors and assigns and
all of
the aforesaid companies’ past and present officers, directors, employees,
trustees, shareholders, representatives and agents (the “Company Releasees”),
from any and all claims, demands, obligations, liabilities and causes of
action
of any kind or description whatsoever, in law, equity or otherwise, whether
known or unknown, that any Executive Releasor had, may have had or now has
against the Company or any other Company Releasee as of the date of execution
of
this Agreement and Release arising out of or relating to the Executive’s
employment relationship, or the termination of that relationship, with the
Company (or any affiliate), including, but not limited to, any claim, demand,
obligation, liability or cause of action arising under any Federal, state,
or
local employment law or ordinance (including, but not limited to, Title VII
of
the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay
Act,
the Americans With Disabilities Act of 1991, the Workers Adjustment and
Retraining Notification Act, the Employee Retirement Income Security Act
(other
than any claim for vested benefits), the Family and Medical Leave Act, and
the
Age Discrimination in Employment Act, as amended by the Older Workers’ Benefit
Protection Act), tort, contract, or alleged violation of any other legal
obligation (collectively “Released Executive Claims”). Anything to
the contrary notwithstanding in this Agreement and Release or the Employment
Agreement, nothing herein shall release any Company Releasee from any claims
or
damages based on (i) any right the Executive may have to enforce this Agreement
and Release or any right provided pursuant to Section 9 or Section 20 of
the
Employment Agreement, or (ii) any right or claim that arises after the date
of
this Agreement and Release.
The
Executive acknowledges that he has been provided a period of at least 21
calendar days in which to consider and execute this Agreement and
Release. The Executive further acknowledges and understands that he
has seven calendar days from the date on which he executes this Agreement
and
Release to revoke his acceptance by delivering to the Company
26
written
notification of his intention to revoke this Agreement and
Release. This Agreement and Release becomes effective when signed
unless revoked in writing and in accordance with this seven-day
provision. To the extent that the Executive has not otherwise done
so, the Executive is advised to consult with an attorney prior to executing
this
Agreement and Release.
This
Agreement and Release shall be
governed by and construed and interpreted in accordance with the laws of
New
York without reference to principles of conflicts of law.
Xxxxxx
X. Xxxxxx
|
||
Date:____________________________
|
27
Exhibit
B
AGREEMENT
AND RELEASE OF CLAIMS
THIS
AGREEMENT AND RELEASE is executed by THE WARNACO GROUP, INC. (the “Company”) as
of the date of this Agreement and Release.
The
Company, on behalf of itself and its affiliated companies and their past
and
present parents, subsidiaries, officers, directors and successors and assigns
but excluding the Executive (the “Company Releasors”), hereby releases and
forever discharges the Executive from any and all claims, demands, obligations,
liabilities and causes of action of any kind or description whatsoever, in
law,
equity or otherwise, that any Company Releasor has, may have had or now has
against the Executive as of the date of execution of this Agreement and Release
arising out of or relating to the Executive’s employment relationship, or the
termination of that relationship, with the Company (or any affiliate),
including, but not limited to, any claim, demand, obligation, liability or
cause
of action arising under any Federal, state, or local statute, regulation,
ordinance or order or any claim based on tort or contract law, other than
any
claim, demand, obligation, liability or cause of action that is based on
any
fraudulent act or on facts unknown to the Company or any Company Releasor
on or
prior to the date of this Agreement and Release. Anything to the
contrary notwithstanding in this Agreement and Release or the Employment
Agreement, nothing herein shall release the Executive or any other person
released herein from any claims or damages based on (i) any right the Company
or
any of its affiliates may have to enforce this Agreement and Release or any
right as provided pursuant to Section 20 of the Employment Agreement or
(ii) any right or claim that arises after the date of this Agreement and
Release.
This
Agreement and Release shall be
governed by and construed and interpreted in accordance with the laws of
New
York without reference to principles of conflicts of law.
28
THE
WARNACO GROUP, INC.
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
Date:
|
29