EXHIBIT 10.1
[TARRANT LETTERHEAD]
November 26, 2007
Xxxxx X. Xxxxx
RE: SEPARATION TERMS AND GENERAL RELEASE AGREEMENT
Dear Xxxxx:
This letter confirms the terms of your separation from the employment
of Tarrant Apparel Group and consideration in exchange for your waiver and
general release of claims in favor of Tarrant Apparel Group and its officers,
directors, employees, agents, representatives, subsidiaries, divisions,
affiliated companies, successors, and assigns (collectively, the "COMPANY" or
"TARRANT").
1. TERMINATION DATE. Your employment with the Company will end
effective November 28, 2007 (the "TERMINATION DATE"). Between now and the
Termination Date, you should assist with any transition-related activities as
directed by the employee to whom you directly report.
2. ACKNOWLEDGMENT OF PAYMENT OF WAGES. On or before execution of this
release, we delivered to you a final paycheck that includes payment for all
accrued wages, salary, accrued and unused vacation time, reimbursable expenses,
and any similar payments due and owing to you from the Company as of the
Termination Date (collectively referred to as "WAGES"). You are entitled to
these Wages regardless of whether you sign this Separation Terms and General
Release Agreement (this "AGREEMENT").
3. CONSIDERATION FOR RELEASE. In consideration of the waiver and
release of claims set forth in Paragraphs 7 and 8 below, and in exchange for
your signing this Agreement, the Company agrees to pay you $92,500, less
applicable federal and state withholdings, in a lump sum payment within 5 days
following the expiration of the revocation period described in Paragraph 19
below (the "SEVERANCE PAYMENT"). The Severance Payment is in addition to any
amounts owed to you by the Company. You acknowledge and agree that you are not
otherwise entitled to receive the Severance Payment. You understand that if you
do not sign the Agreement, or if you revoke the signed Agreement as described in
Paragraph 19 below, the Company has no obligation to provide you with the
Severance Payment.
4. COBRA CONTINUATION COVERAGE. Your Company provided health coverage
will end on your Termination Date. If you are eligible for, and timely elect
COBRA continuation, you may continue health coverage pursuant to the terms and
conditions of COBRA at your own expense. Our Human Resources Department will
contact you shortly after your Termination Date. All other insured benefit
coverage (e.g., life insurance, disability insurance) will also end on your
Termination Date.
5. RETURN OF COMPANY PROPERTY. By signing below, you represent that you
have returned all the Company property and data of any type whatsoever that was
in your possession or control.
6. CONFIDENTIAL INFORMATION. You hereby acknowledge that as a result of
your employment with the Company you have had access to the Company's
confidential information. You acknowledge your continuing obligations under the
Employee Confidentiality Agreement you have previously executed, and you agree
you will hold all such confidential information in strictest confidence and that
you may not make any use of such confidential information. You further confirm
that you have delivered to the Company all documents and data of any nature
containing or pertaining to such Confidential Information and that you have not
taken with you any such documents or data or any copies thereof.
7. GENERAL RELEASE AND WAIVER OF CLAIMS.
7.1 The payments and agreements set forth in this Agreement
fully satisfy any and all accrued salary, vacation pay, bonus and
commission pay, stock-based compensation, profit sharing, termination
benefits or other compensation to which you may be entitled by virtue
of your employment with the Company or your termination of employment.
You acknowledge that you have no claims and have not filed any claims
against the Company based on your employment with or the separation of
your employment with the Company.
7.2 To the fullest extent permitted by law, you hereby release
and forever discharge the Company, its successors, subsidiaries and
affiliates, directors, shareholders, current and former officers,
agents and employees (all of whom are collectively referred to as
"RELEASEES") from any and all existing claims, demands, causes of
action, damages and liabilities, known or unknown, that you ever had,
now have or may claim to have had arising out of or relating in any way
to your employment or separation from employment with the Company
including, without limitation, claims based on any oral, written or
implied employment agreement, claims for wages, bonuses, commissions,
stock-based compensation, expense reimbursement, and any claims that
the terms of your employment with the Company, or the circumstances of
your separation, were wrongful, in breach of any obligation of the
Company or in violation of any of your rights, contractual, statutory
or otherwise. Each of the Releasees is intended to be a third party
beneficiary of the General Release and Waiver of Claims set forth in
this Paragraph 7.
(a) RELEASE OF STATUTORY AND COMMON LAW CLAIMS. Such
rights include, but are not limited to, your rights under the
following federal and state statutes: the Employee Retirement
Income Security Act (ERISA) (regarding employee benefits); the
Occupational Safety and Health Act (safety matters); the
Family and Medical Leave Act of 1993; the Worker Adjustment
and Retraining Act ("WARN") (notification requirements for
employers who are curtailing or closing an operation) and
common law; tort; wrongful discharge; public policy; workers'
compensation retaliation; tortious interference with
contractual relations, misrepresentation, fraud, loss of
consortium; slander, libel, defamation, intentional or
negligent infliction of emotional distress; claims for wages,
bonuses, commissions, stock-based compensation or fringe
benefits; vacation pay; sick pay; insurance reimbursement,
medical expenses, and the like.
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(b) RELEASE OF DISCRIMINATION CLAIMS. You understand
that various federal, state and local laws prohibit age, sex,
race, disability, benefits, pension, health and other forms of
discrimination, harassment and retaliation, and that these
laws can be enforced through the U.S. Equal Employment
Opportunity Commission, the National Labor Relations Board,
the Department of Labor, and similar state and local agencies
and federal and state courts. You understand that if you
believe your treatment by the Company violated any laws, you
have the right to consult with these agencies and to file a
charge with them. Instead, you have decided voluntarily to
enter into this Agreement, release the claims and waive the
right to recover any amounts to which you may have been
entitled under such laws, including but not limited to, any
claims you may have based on age or under the Age
Discrimination in Employment Act of 1967 ("ADEA"; 29 U.S.C.
Section 621 et. seq.) (age); the Older Workers Benefit
Protection Act ("OWBPA") (age); Title VII of the Civil Rights
Act of 1964 (race, color, religion, national origin or sex);
the 1991 Civil Rights Act; the Vocational Rehabilitation Act
of 1973 (disability); The Americans with Disabilities Act of
1990 (disability); 42 U.S.C. Section 1981, 1986 and 1988
(race); the Equal Pay Act of 1963 (prohibits pay differentials
based on sex); the Immigration Reform and Control Act of 1986;
Executive Order 11246 (race, color, religion, sex or national
origin); Executive Order 11141 (age); Vietnam Era Veterans
Readjustment Assistance Act of 1974 (Vietnam era veterans and
disabled veterans); and California state statutes and local
laws of similar effect.
7.3 Releasees and you do not intend to release claims (i)
which you may not release as a matter of law (including, but not
limited to, indemnification claims under applicable law); (ii) for
unemployment, state disability and/or paid family leave insurance
benefits pursuant to the terms of applicable state law; (iii) for any
benefit entitlements that are vested as of the Termination Date
pursuant to the terms of a Company-sponsored benefit plan governed by
the federal law known as "ERISA"; and (iv) for vested option shares
pursuant to the written terms and conditions of your existing stock
option grants and agreements existing as of the Termination Date. To
the fullest extent permitted by law, any dispute regarding the scope of
this general release shall be determined by an arbitrator under the
procedures set forth in Paragraph 12.
8. WAIVER OF UNKNOWN CLAIMS. You expressly waive any benefits of
Section 1542 of the Civil Code of the State of California (and any other laws of
similar effect), which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR."
9. COVENANT NOT TO SUE.
9.1 To the fullest extent permitted by law, you agree that you
will not now or at any time in the future pursue any charge, claim, or
action of any kind, nature and character whatsoever against any of the
Releasees, or cause or knowingly permit any such charge, claim or
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action to be pursued, in any federal, state or municipal court,
administrative agency, arbitral forum, or other tribunal, arising out
of any of the matters covered by Paragraphs 7 and 8 above.
9.2 You further agree that you will not pursue, join,
participate, encourage, or directly or indirectly assist in the pursuit
of any legal claims against the Releasees, whether the claims are
brought on your own behalf or on behalf of any other person or entity.
9.3 Nothing in this paragraph shall prohibit you from: (1)
providing truthful testimony in response to a subpoena or other
compulsory legal process, and/or (2) filing a charge or complaint with
a government agency such as the Equal Employment Opportunity
Commission, the National Labor Relations Board or applicable state
anti-discrimination agency.
10. NON-DISPARAGEMENT. You agree that you will not make any statement,
written or oral, or engage in any conduct that is or could reasonably be
construed to be disparaging of the Company or its products, services, agents,
representatives, directors, officers, shareholders, attorneys, employees,
vendors, affiliates, successors or assigns, or any person acting by, through,
under or in concert with any of them. Nothing in this paragraph shall prohibit
you from providing truthful testimony in response to a subpoena or other
compulsory legal process.
11. LEGAL AND EQUITABLE REMEDIES. You and the Company agree that either
party shall have the right to enforce this Agreement and any of its provisions
by injunction, specific performance or other equitable relief without prejudice
to any other rights or remedies that either party may have at law or in equity
for breach of this Agreement.
12. ARBITRATION OF DISPUTES. Except for claims for injunctive relief
arising out of a breach of the Employee Confidentiality Agreement, you and the
Company agree to submit to mandatory binding arbitration any future disputes
between you and the Company, including any claim arising out of or relating to
this Agreement. By signing below, you and the Company waive any rights you and
the Company may have to trial by jury of any such claims. You agree that the
American Arbitration Association will administer any such arbitration(s) under
its National Rules for the Resolution of Employment Disputes, with
administrative and arbitrator's fees to be borne by the Company. The arbitrator
shall issue a written arbitration decision stating his or her essential findings
and conclusions upon which the award is based. A party's right to review of the
decision is limited to the grounds provided under applicable law. The parties
agree that the arbitration award shall be enforceable in any court having
jurisdiction to enforce this Agreement. This Agreement does not extend or waive
any statutes of limitations or other provisions of law that specify the time
within which a claim must be brought. Notwithstanding the foregoing, each party
retains the right to seek preliminary injunctive relief in a court of competent
jurisdiction to preserve the status quo or prevent irreparable injury before a
matter can be heard in arbitration.
13. ATTORNEYS' FEES. If any legal action arises or is brought to
enforce the terms of this Agreement, the prevailing party shall be entitled to
recover its reasonable attorneys' fees, costs and expenses from the other party,
in addition to any other relief to which such prevailing party may be entitled,
except where the law provides otherwise. The costs and expenses that may be
recovered exclude arbitration fees pursuant to Paragraph 12 above.
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14. CONFIDENTIALITY PROVISION. You agree to keep the contents, terms
and conditions of this Agreement confidential and not disclose them except to
your spouse or domestic partner, attorneys, accountant or as required by
subpoena or court order.
15. MATERIALITY OF BREACH. Any breach of the provisions contained in
Paragraphs 6 through 10 or 14 will be deemed a material breach of this
Agreement.
16. NO ADMISSION OF LIABILITY. You agree that this Agreement is not an
admission or evidence of any wrongdoing or liability on the part of the Company,
its representatives, attorneys, agents, partners, officers, shareholders,
directors, employees, subsidiaries, affiliates, divisions, successors or
assigns. This Agreement will be afforded the maximum protection allowable under
California Evidence Code Section 1152 and/or any other state or Federal
provisions of similar effect.
17. INDEMNIFICATION. The General Release in Paragraph 7 and the Waiver
Of Unknown Claims in Paragraph 8 shall not apply with respect to any claims
arising under your existing rights to indemnification and defense pursuant to
(a) the articles of incorporation and bylaws of the Company for acts as a
director and/or officer, (b) any indemnification agreement with the Company, or
(c) your rights of insurance under any director and officer liability policy in
effect covering the Company's directors and officers.
18. REVIEW OF AGREEMENT. You may not sign this Agreement prior to your
Termination Date. You may take up to twenty-one (21) days from the date you
receive this Agreement, or until your Termination Date, whichever date is later,
to consider this Agreement and release and, by signing below, affirm that you
were advised by this letter to consult with an attorney before signing this
Agreement and were given ample opportunity to do so. You understand that this
Agreement will not become effective until you return the original properly
signed Agreement to the Company, attention: Chief Executive Officer, at the
Company's principal executive officers in Los Angeles, California, and after
expiration of the revocation period without revocation by you.
19. REVOCATION OF AGREEMENT. You acknowledge and understand that you
may revoke this Agreement by faxing a written notice of revocation to the
Company, Attention: Chief Executive Officer, at (000) 000-0000 any time up to
seven (7) days after you sign it. After the revocation period has passed,
however, you may no longer revoke your Agreement. The Company's obligation to
pay you the Severance Payment provided in Paragraph 3 shall not become effective
or enforceable until such revocation period has expired.
20. ENTIRE AGREEMENT. This Agreement together with the Employee
Confidentiality Agreement that you previously executed is the entire Agreement
between you and the Company with respect to the subject matter of this Agreement
and supersedes all prior negotiations and agreements, whether written or oral,
relating to this subject matter. You acknowledge that neither the Company, nor
its agents or attorneys, made any promise or representation, express or implied,
written or oral, not contained in this Agreement to induce you to execute this
Agreement. You acknowledge that you have signed this Agreement knowingly,
voluntarily and without coercion, relying only on such promises, representations
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and warranties as are contained in this document. You understand that you do not
waive any right or claim that may arise after the date this Agreement is
executed.
21. MODIFICATION. By signing below, you acknowledge your understanding
that this Agreement may not be altered, amended, modified, or otherwise changed
in any respect except by another written agreement that specifically refers to
this Agreement, executed by the Company's authorized representatives and you.
22. GOVERNING LAW. This Agreement is governed by, and is to be
interpreted according to, the laws of the State of California.
23. SAVINGS AND SEVERABILITY CLAUSE. Should any court, arbitrator or
government agency of competent jurisdiction declare or determine any of the
provisions of this Agreement to be illegal, invalid or unenforceable, the
remaining parts, terms or provisions shall not be affected thereby and shall
remain legal, valid and enforceable. Further, it is the intention of the parties
to this Agreement that, if a court, arbitrator or agency concludes that any
claim under Paragraph 7 above may not be released as a matter of law, the
General Release in Paragraph 7 and the Waiver Of Unknown Claims in Paragraph 8
shall otherwise remain effective as to any and all other claims.
If this Agreement accurately sets forth the terms of your separation
from the Company and if you voluntarily agree to accept the terms of the
severance package offered please sign below no earlier than your Termination
Date and return it to Xxxxxx Xxxx.
PLEASE REVIEW CAREFULLY. THIS AGREEMENT CONTAINS
A GENERAL RELEASE OF KNOWN AND UNKNOWN CLAIMS.
Sincerely,
/s/ Xxxxxx Xxxx
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Xxxxxx Xxxx,
Interim Chief Executive Officer
REVIEWED, UNDERSTOOD AND AGREED:
By: /S/ XXXXX X. XXXXX
--------------------------------------------
Xxxxx X. Xxxxx
Date: November 28, 2007
DO NOT SIGN PRIOR TO YOUR TERMINATION DATE
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