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EXHIBIT 10.23
AMENDED XXXXXXXXXX EMPLOYMENT AGREEMENT
AMENDMENT (the "Amendment") dated as of February 5, 1999, among
Biscayne Apparel, Inc. ("BAI"), a Florida corporation, and M&L International,
Inc. ("M&L"), an Illinois corporation (together the "Companies"), and Xxxxx
Xxxxxxxxxx, Xx. (the "Executive").
RECITALS
A. BAI and the Executive entered into an Employment Agreement dated as
of January 1, 1998 (the "Employment Agreement"), a copy of which is annexed
hereto as an Exhibit; and
B. The terms defined in the Employment Agreement are used in this
Amendment as in the Employment Agreement unless otherwise defined herein; and
C. On February 5, 1999 (the "Filing Date"), the Companies filed
voluntary petitions for relief under chapter 11 of title 11 of the United
States Code (the "Bankruptcy Cases") in the United States Bankruptcy Court for
the Southern District of New York (the "Bankruptcy Court"); and
D. By order dated March 4, 1999, M&L was authorized to sell
substantially all of its assets, and to assume and assign certain executory
contracts and leases, to an affiliate of Amerex (USA), Inc. (the "M&L Asset
Sale"), pursuant to the applicable provisions of the Bankruptcy Code; and
E. The M&L Asset Sale closed on March 5, 1999; and
F. After the closing of the M&L Asset Sale, M&L's principal assets
consisted of eligible accounts receivable in the aggregate amount of
approximately $4.2 million and claims against third parties; and
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G. The Companies have determined that their success in the bankruptcy
proceedings is largely dependent on the continued employment of the Executive
during the pendency of the Bankruptcy Cases; and
H. As an incentive for the Executive to remain with the Companies
during the pendency of their respective Bankruptcy Cases, the Companies and the
Executive have requested that the Employment Agreement be amended as
hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
AMENDMENT
1. AMENDMENT TO EMPLOYMENT AGREEMENT. The Employment Agreement is
hereby amended as follows:
(a) Section 1(a) of the Employment Agreement is hereby amended to add
the following definition:
"COMPANIES" means Biscayne Apparel, Inc. and M&L International, Inc.
(b) Section 2(b) of the Employment Agreement is hereby amended and
restated in its entirety as follows:
SALARY AND BENEFITS. For the period from February 5, 1999 to
June 30, 1999, the Companies shall pay the Executive a base annual salary of
$200,000, payable in installments consistent with the Companies' normal payroll
schedule, subject to applicable withholding and other taxes. Following June 30,
1999, the Executive shall be paid on an hourly basis at the rate of $100 per
hour, payable on a weekly basis consistent with the Companies' normal payroll
schedule, subject to applicable withholding and other taxes.
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(c) Section 2(b)(i), (iii), (vi) of the Employment Agreement is hereby
deleted in its entirety.
(d) Section 2(b)(iv) of the Employment Agreement is hereby amended and
restated in its entirety as follows:
For the term of the Employment Period, the Companies shall continue to
provide the Executive with the automobile presently provided to the Executive,
together with insurance and operating expenses thereof with payments therefore
not to exceed $10,000.
(e) Section 2(c) of the Employment Agreement is hereby amended and
restated in its entirety as follows:
SERVICES: The Executive shall serve as the President, Chief Operating
Officer and Chief Financial Officer of BAI and Vice President of M&L and will
render services of an executive and administrative character to the Companies,
and their affiliates. In addition, the Executive shall be responsible for any
and all actions needed to be undertaken by the Debtors during the Bankruptcy
Cases, including but not limited to collection of M&L's accounts receivable,
assertion of claims against third parties, sale of BAI, objections to disputed
claims, preparation of SEC Form 10K and 10Q, corporate tax returns, cash
collateral and/or financing agreements, and negotiations and relations with the
secured lenders, other creditors, Board and shareholders.
(f) Section 2(d) of the Employment Agreement is hereby deleted in its
entirety.
(g) Section 2(e) of the Employment Agreement is hereby amended and
restated in its entirety as follows:
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The Executive's Incentive Compensation, with respect to the Companies'
fiscal year ending December 31, 1998 as determined by the Board of Directors of
the Companies in the amount of $50,000, is hereby ratified.
(h) Section 2(f) of the Employment Agreement is hereby amended and
restated in its entirety as follows:
The Executive shall receive Disposition Incentive Compensation in the
amount of $125,000 with respect to the M&L Asset Sale, payable as follows: (a)
$100,000 upon satisfaction of the claims of the Companies' secured creditors,
The Chase Manhattan Bank, N.A., Xxxxxxx Factors, Inc., BankBoston, N.A., First
Union National Bank, N.A., and Fleet Bank, N.A. (the "Banks"), including
reservation for any disputed portions of the claims of the Banks, and (b)
$25,000 upon the earlier to occur of (i) June 30, 1999 or (ii) the date on
which M&L has collected $3 million on account of its eligible accounts
receivable outstanding as of March 8, 1999 in the aggregate amount of
approximately $4.2 million. In consideration for and subject to the payment of
$25,000, payable on June 30, 1999, and the other promises contained herein, the
Executive hereby (a) releases his claim against BAI in the aggregate amount of
$250,000 arising under section 2(f) of the Employment Agreement with respect to
the disposition of or liquidation of the majority of the common stock or assets
of BAI's affiliates, Biscayne Apparel International, Inc. and Mackintosh of New
England, Inc., (b) releases his severance claim against BAI in the aggregate
amount of $352,500 arising under section 2(d) of the Employment Agreement, (c)
releases his claim for a Special Benefit Payment in the amount of $27,500, and
(d) agrees to the reduction of his Base Salary from $275,000 to $200,000.
2. ESTABLISHMENT OF ESCROW ACCOUNT. Upon payment of amounts due to the
Banks on account of their secured claims against the Companies, the
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Companies shall establish an account into which $50,000 shall be deposited by
the Companies (the "Escrow Account") on account of the deferred payments due to
the Executive under this Amendment. Such Escrow Account shall be maintained by
the Companies' bankruptcy counsel, Xxxxxxx Xxxxx & Xxxxxx, P.C., 000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
3. CONDITION PRECEDENT. This Agreement is subject to the approval of
the Bankruptcy Court. The Companies agree to use responsible efforts to obtain
such approval.
4. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York.
5. HEADINGS. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of the
Amendment for any other purpose.
6. COUNTERPARTS. The Amendment may be executed in counterparts, all of
which taken together shall constitute one and the same instrument, and any
party hereto may execute this Amendment by signing such counterpart.
7. EFFECT OF AMENDMENT. Except as expressly modified herein, the
Employment Agreement shall remain in full force and effect.
IN WITNESS THEREOF, the parties hereto have caused this Amendment to
be duly executed as of the day and year first above written.
By: /s/ Xxxxx Xxxxxxxxxx, Xx.
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Xxxxx Xxxxxxxxxx, Xx.
BISCAYNE APPAREL, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Chairman and CEO
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M&L INTERNATIONAL, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Vice President
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