THIS AGREEMENT IS SUBJECT TO ARBITRATION
AS PROVIDED IN SECTION M
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement"), dated as of July 24,
2001, entered into between X.X. Xxxxxx, III, an individual residing in Dallas
County, Texas ("Executive"), and Haggar Clothing Co., a Nevada corporation,
having principal offices at 0000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxx ("Haggar" or the
"Company").
Through this Agreement Haggar employs Executive, and Executive accepts
employment by Haggar, upon the terms and subject to the conditions of this
Agreement.
Now, therefore, in consideration of the premises, the agreements and
covenants set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, Haggar and
Executive agree as follows:
A. DEFINITIONS In this Agreement (including this Section) the following
terms shall have the following meaning:
1. "Affiliate" shall mean, with respect to any Person, any Person
which, directly or indirectly controls or is controlled by that Person, or is,
under common control with that Person. For purposes of this definition,
"control" (including, with correlative meaning, the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities or by contract or otherwise.
2. The "Plan" shall mean the Haggar Clothing Co. Corporate Severance
Plan for Associates effective August 29, 1997, and any subsequent modifications
or amendments thereto.
3. "Person" shall mean any individual, corporation, partnership,
joint venture, trust, association, unincorporated organization or other entity.
4. "Section" shall refer to sections of this Agreement.
5. "Effective Date" shall mean the date the Agreement commences as
set forth in Section C.
EXECUTIVE EMPLOYMENT AGREEMENT 1
6. "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with Haggar Corp., if each such corporation (other than
the last corporation in the unbroken chain) owns stock possessing more than
fifty per cent (50%) of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
B. DUTIES OF EXECUTIVE. Executive shall serve as the Chief Executive
Officer and Chairman of the Company. In this capacity, Executive shall perform
such customary, appropriate and reasonable executive duties as are usually
performed by the chief executive officer and chairman, including such duties as
are delegated to him from time to time by the Board of Directors of Haggar Corp.
Executive shall report directly to Haggar's Board of Directors.
C. TERM. This Agreement shall be effective commencing on August 30,
2001 (the "Effective Date"), and continue for a period of three (3) years.
Unless either Haggar or Executive has given the other party at least thirty (30)
days' prior written notice of intention not to extend the term hereof, this
Agreement shall, as of its first anniversary, and on each annual anniversary
thereof, be extended automatically, without further action by the Employee or
the Company, for an additional one (1) year, so that there shall, as of August
30 of each year, be three (3) years remaining in the term of this Agreement (the
"Employment Period"), subject to earlier termination pursuant to the provisions
of Section X.
X. TIME REQUIRED TO DEVOTE TO DUTIES AND PLACE OF EMPLOYMENT. Executive
shall devote his full working time, attention and ability to the business of
Haggar, including, if applicable, its Subsidiaries and/or Affiliates to which
Executive may have been assigned responsibilities under Section B. Executive
shall well and faithfully serve Haggar, including such applicable Subsidiaries
and/or Affiliates, during the continuance of his employment under this Agreement
and use his best efforts to promote the interests and welfare of Haggar, its
Subsidiaries and Affiliates. Notwithstanding the foregoing, Executive shall be
entitled to participate in community affairs and passive investment activities
not involving any measurable portion of Executive's business time, so long as
such activities do not interfere with the due performance of his duties under
this Agreement. Executive's place of employment shall be the Dallas/Fort Worth,
Texas, area or such other area in which the Board of Directors of Haggar, with
the concurrence of the chief executive officer of Haggar, shall determine to
locate the principal executive offices of Haggar.
E. COMPENSATION. During the term defined above, Haggar shall pay the
Executive the following compensation:
1. BASIC SALARY. Basic salary at an annual rate of $640,000.00 (the
"Basic Salary"), payable on Haggar's regular payroll dates. Haggar may, in its
sole discretion, increase Executive's Basic Salary in light of his performance,
inflation and cost of living, and other factors deemed relevant by Haggar;
provided, however, that Executive's Basic Salary may not be decreased below the
initial Basic Salary during the term of this Agreement. The Compensation
Committee of the Board of Directors shall meet with Executive annually to review
his performance, objectives and compensation. If the Compensation Committee
determines that any
EXECUTIVE EMPLOYMENT AGREEMENT 2
adjustments are appropriate, it shall make a recommendation to the full Board of
Directors, which shall make such adjustments thereto as the Board of Directors
deems appropriate and consistent with this Agreement.
2. BONUS. A bonus calculated in accordance with Haggar's Executive
Bonus Plan in effect from time to time.
3. EXPENSES AND REIMBURSEMENTS. Executive will be entitled to
reimbursement for reasonable out-of-pocket expenses incurred by Executive that
are directly attributable to the performance of Executive's duties under this
Agreement. Executive will adhere to Haggar's customary practices and procedures
with respect to incurring out-of-pocket expenses and will present such expense
statements, receipts, and vouchers, or other evidence supporting expenses
incurred by Executive as Haggar may from time to time request.
4. BENEFITS.
(a) Executive shall be entitled to participate in all hospital,
medical, dental, group life, short and long-term disability, other health and
welfare benefits, and such employee pension benefit plans as are made available
generally to other executives of Haggar.
(b) Executive shall be entitled to vacation and floating holidays
in accordance with Haggar's policies currently in effect and from time to time
modified for its executive employees.
(c) An annual car allowance in the amount of $14,400.00, to be
paid monthly.
(d) If Executive becomes disabled during the term of this
Agreement (or any extension or renewal) Haggar shall continue to pay Executive
his full Basic Salary for up to one year, or if earlier, until the earliest to
occur of (i) the cessation of such disability; or (ii) the Executive's death;
provided, however, that if the Executive should die within one (1) year after
the date of disability (or most recent disability), the payment of disability
benefits shall continue for such one-year period. The amount payable to the
Executive shall be offset on a prospective basis by (i) the amount of any
proceeds received by Executive from any disability income program (whether or
not insured) maintained by Haggar or any Affiliate; (ii) the amount of any
disability payment under the U.S. Social Security Disability Insurance Program;
and (iii) any amount of compensation received by Executive from gainful
employment, other than employment approved by Executive's physician for therapy
or rehabilitation. For purposes of this paragraph, Executive shall be deemed
disabled if he suffers a physical, mental or emotional injury, illness or
disorder that renders him unable to capably perform in Haggar's opinion
substantially all of his usual and customary duties for Haggar with the degree
of decorum and dignity normally associated with employment in a similar
capacity. If there is a disagreement between Haggar and Executive concerning the
existence of a disability, such disagreement shall be resolved by the opinion of
a physician selected by Haggar. Haggar shall pay the cost of the assessment and
determination of such physician. Subject to the above limitations, Executive's
EXECUTIVE EMPLOYMENT AGREEMENT 3
Basic Salary shall be continued until such time as a determination is made on
the issue of disability.
F. CONFIDENTIAL INFORMATION. Executive acknowledges that, in the course
of performing and fulfilling his duties under this Agreement, he may have access
to and may be entrusted with confidential information concerning the present and
contemplated activities of and the techniques and modes of business operations
evolved and used or to be evolved and used by Haggar, its Subsidiaries and
Affiliates and their respective customers and clients, which information is not
generally known in the industry in which Haggar does business, the disclosure of
any of which confidential information to competitors of Haggar, its Subsidiaries
or Affiliates or to other persons would be highly detrimental to the interests
of Haggar, its Subsidiaries and Affiliates (the "Confidential Information").
Executive further acknowledges and agrees that the right to maintain
confidential such information constitutes a proprietary right that Haggar, its
Subsidiaries or Affiliates are entitled to protect. Accordingly, Executive
covenants and agrees with Haggar and with each Subsidiary and Affiliate of
Haggar that (i) he will not, during the continuance of his employment under this
Agreement, directly or indirectly disclose any of such Confidential Information
to any Person, nor shall he use the same, except as required in the normal
course of his employment; and (ii) after the termination or expiration of his
employment under this Agreement, he will not directly or indirectly disclose or
make any use of the Confidential Information without the written consent of
Haggar for himself or any third parties; and (iii) after the termination or
expiration of his employment under this Agreement, he will return the originals
and all copies of any documents or other media containing Confidential
Information in his possession or under his control to Haggar; provided, however,
that Haggar acknowledges and agrees that Executive shall not be prohibited by
this Section from using the personal skills and know-how developed by Executive
prior to the execution of this Agreement and during the term of this Agreement,
and subject to the provisions of Section H, Executive shall be allowed to pursue
a career and earn his livelihood through the use of such general skills and
know-how he has obtained (but not any Confidential Information, systems or
techniques of Haggar) before and during his employment under this Agreement
after the termination or expiration of this Agreement without the express
consent of, or any liability to, Haggar. Executive acknowledges and agrees that
in the event of any actual or threatened violation of the provisions of this
Section F or of Sections G or H, Haggar and/or any Subsidiary or Affiliate may
commence proceedings in any court of competent jurisdiction for, and shall be
entitled to obtain, preliminary and permanent injunctive relief or other
appropriate equitable remedies (without any bond or other security being
required) and an accounting of all profits and benefits arising out of such
violation, which rights and remedies shall be in addition to any other rights or
remedies to which Haggar may be entitled at law.
G. NON-SOLICITATION. During the time of Executive's employment and for
a period of two (2) years after the termination of Executive's employment for
any reason whatsoever, Executive shall not, without the prior written consent of
Haggar, engage in any of the conduct described in subsections (1) and (2) below,
either directly or indirectly or in any capacity for any other Person:
EXECUTIVE EMPLOYMENT AGREEMENT 4
1. Directly or indirectly hire, attempt to hire, or assist any other
person or entity in hiring or attempting to hire any person who was a Haggar
employee, consultant or agent within the 12-month period prior to the
termination of Executive's employment; or
2. directly or indirectly solicit, divert or take away, in
competition with Haggar, the business or patronage of any Person who was a
customer, supplier, distributor, licensor or licensee of Haggar within the
12-month period prior to the termination of Executive's employment.
H. COVENANT NOT TO COMPETE. As an ancillary covenant to the terms and
conditions set forth elsewhere in this Agreement, and in particular the
covenants set forth in Sections F and G above, and in consideration of the
mutual promises set forth in this Agreement and other good and valuable
consideration received and to be received, including without limitation, access
to Confidential Information as described above, Executive covenants and agrees
with Haggar that he will not (without the prior written consent of Haggar) at
any time during the term of this Agreement and during the Applicable Period,
either individually or in partnership or in conjunction with any Person or
Persons, as principal, agent, shareholder, guarantor, creditor, employee,
consultant or in any other manner whatsoever, carry on any business of, or be
engaged in, consult or advise, lend money to, guarantee the debts or obligations
of, or permit his name or any part thereof to be used by, any Person engaged in
or concerned with or interested in any business carried on, within the United
States or the provinces of Canada in which Haggar carries on business, which
competes with the products manufactured and sold or services provided by Haggar
(the "Business"). For purposes of this Section H, the "Applicable Period" shall
mean a period commencing upon termination of employment and continuing:
(i) if termination of employment by Haggar is for other than Cause,
until the expiration of the term contemplated by Section C; or
(ii) if a Change of Control Termination occurs or employment is
terminated for any other reason, for one (1) year.
I. REASONABLENESS OF RESTRICTIONS. The Executive acknowledges that,
while performing his duties under this Agreement, he will have access to and
come into contact with trade secrets and Confidential Information belonging to
Haggar and will obtain personal knowledge of and influence over its world-wide
operations, customers and/or employees. The Executive agrees that the
restrictions contained in Sections F, G, and H are reasonable, supported by
valid consideration, and necessary to protect the legitimate business interests
of Haggar both during and after the termination of this Agreement.
J. RIGHTS AND REMEDIES OF HAGGAR. This Agreement is terminable prior to
the expiration of the term by Haggar for "Cause", as determined in good faith by
the Board of Directors of Haggar Corp. As used in this Agreement, "Cause" shall
be limited to the following:
EXECUTIVE EMPLOYMENT AGREEMENT 5
1. Executive's repeated unavailability or refusal to devote the time
required for the performance of his duties as described in Section B;
2. Executive's intentional and repeated refusal to follow
instructions of the Board of Directors of Haggar Corp. (provided such
instructions are made in good faith, are not arbitrary or capricious and do not
require Executive to subject himself to criminal liability or material civil
liability against which he is not indemnified by Haggar) (Haggar acknowledges
that "intentional and repeated" connotes reasonable notice to Executive after
one or more instances of refusal and prior to any further instances which,
together with earlier ones, are relied on by Haggar for termination under this
paragraph);
3. Intentional misrepresentation or unlawful conduct by Executive in
the discharge of his responsibilities;
4. Executive's intentional disclosure to third parties of any
Confidential Information (as described in Section F) outside the normal course
of his employment and without Haggar's consent; or
5. Theft of or fraud by Executive involving property of Haggar or
its customers, or conviction of Executive of a felony criminal offense; or any
other action by Executive involving moral turpitude and reflecting unfavorably
upon the public image of Haggar.
Haggar recognizes that one of the principal benefits to it of the
employment of Executive under this Agreement will be the benefit of Executive's
best independent judgment in connection with his area of responsibility.
Accordingly, notwithstanding anything to the contrary in this Agreement, Cause
shall not include Executive's exercising his right to articulate to Haggar
Corp.'s Board of Directors his views as to Haggar's plans or policies, so long
as he carries out the instructions of the Board of Directors of Haggar Corp.
(provided such instructions are made in good faith, are not arbitrary or
capricious and do not require Executive to subject himself to criminal liability
or material civil liability against which he is not indemnified by Haggar).
Prior to terminating Executive's employment, Haggar will advise
Executive in writing of the grounds for such termination and Executive shall
have a period of 30 days after such notice is given within which to cure or
contest such claimed grounds, and Haggar may not terminate his employment for
cause unless such nonperformance is not cured during that period, or, if
contested by Executive, shall have been given a reasonable opportunity to appear
before the Board, with or without legal representation, to present arguments and
evidence on his behalf.
Upon termination for Cause, Haggar shall pay Executive any
accrued and unpaid Basic Salary through the date of termination.
K. RIGHTS AND REMEDIES OF EXECUTIVE.
EXECUTIVE EMPLOYMENT AGREEMENT 6
If termination of Executive's employment by Haggar is not for Cause,
Executive shall be entitled to receive, as the exclusive remedy for such
termination, violation or failure, payment of the then Basic Salary (payable
when and as such payments would have become due) for a period beginning on the
date of termination and ending on the date on which the term of this Agreement
would have expired in accordance with Section C, reduced by any payments made to
Executive pursuant to the Plan or from any other Person as compensation for
services rendered. It is understood, however, that Executive shall have no
obligation to seek other employment during such period. In the event of any
violation of Sections F, G or H, Executive shall cease to be entitled to any
payments pursuant to this Section K or the Plan (no limitation on any other
remedies available to Haggar being intended).
L. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE EMPLOYEE.
1. The Executive represents and warrants to Haggar that:
(a) There are no restrictions, agreements or understandings
whatsoever to which the Executive is a party that would prevent or make unlawful
the Executive's execution of this Agreement or the Executive's employment under
this Agreement, or which is or would be inconsistent, or in conflict with this
Agreement or the Executive's employment under this Agreement, or would prevent,
limit or impair in any way the performance by the Executive of the obligations
under this Agreement; and
(b) The Executive has disclosed to Haggar all restraints,
confidentiality commitments or other employment restrictions that Executive has
with any other employer, person or entity.
2. Upon and after the Executive's termination or cessation of
employment with Haggar and until such time as no obligations of the Executive to
Haggar hereunder exist, the Executive: (i) shall provide a complete copy of this
Agreement to any prospective employer or other person, entity or association in
the Business, with whom or which the Executive proposes to be employed,
affiliated, engaged, associated or to establish any business or remunerative
relationship prior to the commencement; and (ii) shall notify Haggar of the name
and address of any such Person, entity or association prior to the Executive's
employment, affiliation, engagement, association or the establishment of any
business or remunerative relationship.
M. ARBITRATION. Except as contemplated by the last sentence of Section
F, any dispute between the parties to this Agreement, whether arising during the
period of this Agreement or at any time thereafter which relates to the
validity, construction, meaning, performance or effect of this Agreement or the
rights and obligations of the parties shall be determined pursuant to the
arbitration rules for employment disputes of the American Arbitration
Association in Dallas, Texas. The decision of the arbitrators pursuant to such
procedures shall be final and binding upon the parties and shall not be subject
to appeal and may be enforceable in my court of competent jurisdiction located
in Dallas County, Texas.
EXECUTIVE EMPLOYMENT AGREEMENT 7
N. ASSIGNMENT. Neither this Agreement nor the parties' obligations
under this Agreement are assignable; provided, however, if all or substantially
all of the assets and liabilities of Haggar are transferred to another Person at
any time during the term of this Agreement, this Agreement shall be assigned to
such Person, and Executive shall continue to be bound by the provisions of this
Agreement provided that such assignee shall assume and agree to perform all
obligations of Haggar expressed in this Agreement. No such assignment shall
release Haggar from its obligations to Executive under this Agreement, and
Haggar shall remain liable hereunder notwithstanding such assignment.
X. XXXXXXXXX PAYMENT AFTER CHANGE OF CONTROL.
1. This Section O sets forth an agreement regarding Executive's
rights and obligations upon a Change of Control (as defined below). These
provisions are intended to assure and encourage in advance Executive's continued
attention and dedication to his assigned duties and his objectivity during the
pendency and after the occurrence of a Change of Control. These provisions apply
in lieu of, and expressly supersede, the provisions of Section K regarding
payments following termination of employment, if (i) termination of employment
is initiated by the Executive for Good Reason (as defined below) within
twenty-four (24) months after the Change of Control; or (ii) termination of
employment by Haggar occurs within twenty-four (24) months after the Change of
Control other than for Cause (a "Change of Control Termination"). These
provisions shall terminate and be of no further force or effect following
twenty-four (24) months after the Change of Control.
2. Upon a Change of Control Termination, in addition to any benefit
to which the Executive is entitled under the Plan, Haggar shall pay Executive
any accrued and unpaid Basic Salary through the date of termination, and a lump
sum severance payment equal to 2.99 times the Executive's "Base amount," as
defined in Section 28OG of the Internal Revenue Code of 1986, as amended (the
"Code"). In addition, if it is determined that any benefits or payment by Haggar
to or for the benefit of Executive (a "Payment") would be subject to the excise
tax imposed by Section 4999 of the Code, or any interest or penalties are
incurred by Executive with respect to such excise tax (collectively the "Excise
Tax"), then Executive shall be entitled to receive an additional payment (a
"Gross-up Payment") in an amount such that, after payment by Executive of all
taxes, interest and penalties, including, without limitation, any income taxes
and Excise Tax imposed upon the Gross-up Payment, Executive retains an amount of
the Gross-up Payment equal to the Excise Tax imposed upon the Payments. All
determinations required to be made under this Section O. shall be made by an
independent national accounting firm selected by Haggar (the "Accounting Firm")
which shall provide detailed supporting calculations to Haggar and the
Executive. Any determination by the Accounting Firm shall be conclusive and
binding upon Haggar and the Executive. Any Gross-up Payment determined shall be
paid by Haggar to the Executive within five (5) days of the receipt of the
determination.
(a) As a result of the uncertainty in the application of Section
4999 of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by Haggar should have been made
EXECUTIVE EMPLOYMENT AGREEMENT 8
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that Haggar exhausts its remedies pursuant to
subparagraph (b) and the Executive thereafter is required to make a payment of
any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by Haggar to or for the benefit of the Executive.
(b) The Executive shall notify Haggar in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
Haggar of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the Executive is
informed in writing of such claim and shall apprise Haggar of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to Haggar (or such shorter period ending
on the date that any payment of taxes with respect to such claim is due). If
Haggar notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(i) give Haggar any information reasonably requested by it
relating to such claim;
(ii) take such action in connection with contesting such
claim as Haggar shall reasonably request in writing from
time to time, including, without limitation, accepting
legal representation with respect to such claim by an
attorney reasonably selected by Haggar;
(iii) cooperate with Haggar in good faith in order effectively
to contest such claim; and
(iv) permit Haggar to participate in any proceedings relating
to such claim;
provided, however, that Haggar shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation of the foregoing provisions of
this subparagraph (b), Haggar shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and xxx for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as Haggar shall determine;
provided, however that if Haggar directs the Executive to pay such claim and xxx
for a refund, Haggar shall advance the amount of such payment to the Executive,
on an interest-free basis and shall indemnify and hold the Executive harmless on
an after-tax
EXECUTIVE EMPLOYMENT AGREEMENT 9
basis, from any Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore,
Haggar's control of the contest shall be limited to issues with respect to which
a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(c) If, after the receipt by the Executive of an amount advanced
by Haggar pursuant to subparagraph (b), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
Haggar's complying with the requirements of subparagraph (b)), promptly pay to
Haggar the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by Haggar pursuant to subparagraph (b), a determination is
made that the Executive shall not be entitled to any refund with respect to such
claim and Haggar does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
3. Upon a Change of Control, Executive's outstanding stock options,
restricted stock grants, Profit Sharing Program awards, and other benefits or
incentive awards subject to vesting schedules shall become 100% vested and
exercisable .
4. Upon a Change of Control Termination, and for a period of one (1)
year after such termination, Executive shall be entitled to continued benefits
for himself and/or his family at Haggar's expense at least equal to those which
would have been provided to them under the health and welfare benefit plans
provided by Haggar prior to the Change of Control.
5. Unless otherwise provided in this Agreement, any severance or
other payment payable to Executive under this Section shall be paid within ten
(10) days after the date of termination. Severance or other payments shall not
be discounted by reason of the fact that the time of payment is accelerated in
advance of the ordinary course of payments under this Agreement.
6. This provision shall not affect Executive's participation in, or
determination of, distributions and vested rights under any pension,
profit-sharing, insurance, performance unit plan or other employee benefit plan
of Haggar to which Executive is entitled pursuant to the terms of such plans,
except for the acceleration of vested rights pursuant to this Section.
7. For the purposes of this Agreement, a "Change of Control" shall
be deemed to have taken place if one or more of the following occurs: (i) a
merger or consolidation of Haggar Corp. or the Company with or into another
corporation in which Haggar Corp. or the
EXECUTIVE EMPLOYMENT AGREEMENT 10
Company shall not be the surviving corporation (other than a merger undertaken
solely in order to reincorporate in another state) (for purposes hereof, Haggar
Corp. or the Company shall not be deemed the surviving corporation in any such
transaction if, as the result thereof, it becomes a wholly-owned subsidiary of
another corporation), (ii) a dissolution of Haggar Corp. or the Company, (iii) a
transfer of all or substantially all of the assets of Haggar Corp. or the
Company in one transaction or a series of related transactions to one or more
other persons or entities, (iv) a transaction or series of transactions that
results in any entity, "Person" or "Group" (as defined below), becoming the
beneficial owner, directly or indirectly, of securities of Haggar Corp. or the
Company representing more than 50% of the combined voting power of Haggar
Corp.'s or the Company's then outstanding securities, or (v) during any period
of two (2) consecutive years commencing on or after the date of the Executive
Employment Agreement, individuals who at the beginning of the period constituted
Haggar Corp.'s Board of Directors cease for any reason to constitute at least a
majority, unless the election of each director who was not a director at the
beginning of the period has been approved in advance by directors representing
at least two-thirds (2/3) of the directors then in office who were directors at
the beginning of the period; PROVIDED, HOWEVER, that a "Change of Control" shall
not be deemed to have occurred if the ownership of 50% or more of the combined
voting power of the surviving corporation, asset transferee or Haggar Corp. or
Company (as the case may be), after giving effect to the transaction or series
of transactions, is directly or indirectly held by (A) a trustee or other
fiduciary under an employee benefit plan maintained by Haggar Corp., the
Company, or any Subsidiary, (B) one or more of the "executive officers" of
Haggar Corp. that held such positions prior to the transaction or series of
transactions, or any entity, Person or Group under their control, (C) one or
more of the children of X.X. Xxxxxx, Xx. or their lineal descendants, or any
entity, Person or Group under their control, or (D) one or more members of the
"senior management" of Haggar Corp. or the Company (as defined by the Chief
Executive Officer of the Company) that held such positions prior to the
transaction or series of transactions, or any entity, Person or Group under
their control (collectively, the "Excluded Persons"). As used herein, "Person"
and "Group" shall have the meanings set forth in Sections 13(d)(3) and/or
14(d)(2) of the Securities Exchange Act of 1934, as amended ("1934 Act"), and
"executive officer" shall have the meaning set forth in Rule 3b-7 promulgated
under the 1934 Act.
8. For purposes of this Agreement, "Good Reason" means
(i) the assignment of the Executive of any responsibilities
or duties inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting requirements), or
any other action by the Company which results in a diminution in
such position, authority, duties or responsibilities, excluding for
this purpose an isolated, insubstantial or inadvertent action not
taken in bad faith and which is remedied by the Company within 30
days after receipt of written notice thereof given by the Executive;
(ii) any failure by the Company to comply with any material
provision of this Agreement, including the requirement to pay any
compensation or provide any benefits to which the Executive is
entitled
EXECUTIVE EMPLOYMENT AGREEMENT 11
pursuant to this Agreement, other than an isolated, insubstantial or
inadvertent failure not occurring in bad faith and which is remedied
by the Company within 30 days after receipt of written notice
thereof given by the Executive;
(iii) the Company requiring Executive to be based at any
office or location other than the location where the Executive is
employed as of the date of this Agreement or any office or location
more than 20 miles from such location; or
(iv) any purported termination by the Company of the
Executive's employment other than for Cause.
P. NOTICES. All notices that may, or are required to, be given pursuant
to this Agreement shall be in writing and shall be served properly if personally
delivered or mailed by registered or certified mail, postage pre-paid, addressed
as follows:
HAGGAR: President and Chief Operating Officer
Haggar Clothing Co.
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Copy to: General Counsel
Haggar Clothing Co.
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
EXECUTIVE: X.X. Xxxxxx, III
0000 Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
or such other address or addresses as any such party may from time to time
designate by notice in writing to the others. Notice and communications shall be
effective when actually received by the addressee.
Q. ENTIRE AGREEMENT; AMENDMENTS. This Agreement (together with all
benefit or plan documents referred to in this Agreement) constitutes the entire
understanding between the parties with respect to the subject matter hereof,
superseding all negotiations, prior discussions and agreements, written or oral.
This Agreement may not be amended except in writing executed by both parties. In
the event of an inconsistency between the provisions of this Agreement and any
benefit or plan document referred to in this Agreement, the provision conferring
the greater benefit upon Executive shall control.
R. FURTHER ASSURANCE. Each of the parties hereto shall do or cause to
be made, done and executed, all such further and other things, acts, deeds,
documents, conveyances and
EXECUTIVE EMPLOYMENT AGREEMENT 12
assurances as may be necessary or reasonably required to carry out the intended
purpose of this Agreement fully and effectually.
S. CONSTRUCTION. Where the singular or masculine are used in this
Agreement, the same shall, be construed as the plural or feminine or neuter and
vice versa, where the context so requires or permits.
T. HEADINGS. The headings of the Sections of this Agreement are
inserted for purposes of convenience of reference only and. shall not affect the
construction or meaning of any provision of this Agreement.
U. SEVERABILITY. If any covenant or provision of this Agreement is
determined to be void or unenforceable, in whole or in part, it shall not be
deemed to affect or impair the validity of any other covenant or provision of
the remaining part or parts thereof.
V. SURVIVAL. The provisions of this Agreement set forth in Sections F,
G, H, I, J, K, M and O hereof shall survive the termination of the Executive's
employment under this Agreement.
W. GOOD FAITH. The parties agree to conduct themselves in good faith
and deal fairly with each other in the employment relationship created by this
Agreement and to refrain from action which injures either party's right to
receive the benefits hereof.
X. GOVERNING LAW. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Texas, without giving
effect to its rules governing choice of law.
Y. PROFESSIONAL FEES AND EXPENSES. Other than with respect to claims
brought by the Executive against, or defenses by the Executive of any claim of,
the Company with respect to this Agreement that were determined to have been
made or asserted by the Executive in bad faith or frivolously, the Company
agrees to pay all reasonable legal and professional fees and expenses that the
Executive may reasonably incur as a result of any contest by the Executive, by
the Company or others of the validity or enforceability of, or liability under,
any provision of this Agreement (including as a result of any contest by the
Executive about the amount of any payment under this Agreement).
Z. EMPLOYEE ACKNOWLEDGMENT. THE EMPLOYEE REPRESENTS THAT HE HAS HAD
AMPLE OPPORTUNITY TO REVIEW THIS AGREEMENT, AND THE EMPLOYEE ACKNOWLEDGES THAT
HE UNDERSTANDS THAT THIS AGREEMENT CONTAINS IMPORTANT CONDITIONS OF HIS
EMPLOYMENT AND THAT IT EXPLAINS POSSIBLE CONSEQUENCES, BOTH FINANCIAL AND LEGAL,
IF THE EMPLOYEE BREACHES THE AGREEMENT.
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EXECUTIVE EMPLOYMENT AGREEMENT 13
AS WITNESS the hands of a duly authorized officer of Haggar and of the Executive
the day and year first before written, which is the Effective Date.
EXECUTIVE
---------------------------------------------
Name: X.X. Xxxxxx, III
HAGGAR CLOTHING CO.
By:
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Operating Officer
EXECUTIVE EMPLOYMENT AGREEMENT 14
