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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT made and entered into as of this 10th day of September, 1998 by
and between Xxxx X. Xxxxxxxx (the "Executive") and SAI Acquisition Corp., a
Delaware corporation (the "Company").
WHEREAS, simultaneously with the execution of this Agreement, Sun Apparel,
Inc., a Texas corporation (the "Predecessor"), the stockholders of the
Predecessor, the Company and Xxxxx Apparel Group, Inc., a Pennsylvania
corporation ("Xxxxx"), are executing and delivering an Agreement and Plan of
Merger (the "Merger Agreement");
WHEREAS, pursuant to the Merger Agreement, the Predecessor will be merged
with and into the Company, with the Company continuing as the surviving
corporation under the name "Sun Apparel, Inc.," and the Company will become a
wholly-owned subsidiary of Xxxxx;
WHEREAS, the Board of Directors of the Company (the "Board") desires to
employ the Executive and the Executive desires to furnish services to the
Company upon consummation of the transactions contemplated by the Merger
Agreement on the terms and conditions hereinafter set forth; and
WHEREAS, the parties desire to enter into this Agreement setting forth the
terms and conditions of the employment relationship of the Executive with the
Company;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth below, the parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive, and the
Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth.
2. EMPLOYMENT PERIOD. The period of employment of the Executive by the
Company hereunder (the "Employment Period") shall commence as of the Closing
Date, as such term is defined in the Merger Agreement (the "Effective Date"),
and shall end on December 31, 2001 (such period being referred to herein as the
"Term") or the Date of Termination (as defined in Section 6 below), if earlier.
In the event that the Closing (as defined in the Merger Agreement), does not
occur on or before December 31, 1998 or if the Merger Agreement is terminated
prior thereto as provided therein, then this Agreement shall be deemed to be
null and void ab initio without liability to any party.
3. POSITION AND DUTIES.
(a) Title and Authority. During the Employment Period the Executive shall
serve as President and Chief Executive Officer of the Company and shall report
directly to the Board. During the Employment Period, (i) subject to the
supervisory powers of the Board, the Executive shall have those powers and
duties consistent with his position as President and Chief Executive Officer as
may be prescribed by the Board, and (ii) the Executive shall have the authority
to oversee the day-to-day operations of the business of the Company as provided
in, and subject to the limitations set forth in, Section 7.10 of the Merger
Agreement. Notwithstanding the foregoing, the Executive shall be required to
obtain the approval of the Board prior to making any Major Decision. For
purposes hereof, the term "Major Decision" shall mean the following:
(i) Budget. Any variation of more than 10% from any of the line items
identified on Attachment A annexed hereto of the budget approved by the
Board or any material variation from the business plan approved by the
Board, except where such variation is caused by a Force Majeure Event (as
defined in the Merger Agreement). The foregoing notwithstanding, a
variation of more than 10% in (i) "Gross Sales" shall not be deemed a
"Major Decision" unless the Company shall have made changes in the strategy
upon which the budget was based (e.g., pricing, product mix, customer
allocation), and (ii) any other line item identified on such Attachment A
shall not be deemed a "Major Decision" if such variation is a consequence
of a variation in Gross Sales over which the Executive did not have
material influence.
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(ii) Compensation. The payment of any bonus, severance payment or
expenses related to geographic relocation and living expenses related to
such relocation, or any increase in the rate of salary other than expenses,
payments or increases consistent with past practice.
(iii) Employees. The hiring of any employee, consultant or
independent contractor for compensation, on an annualized basis, exceeding
$250,000.00 per annum (provided, however, that the Board shall not, solely
on the basis of the amount of compensation, disapprove of an employee,
consultant or independent contractor who is proposed to be hired as a
replacement for a terminated or departed employee, consultant or
independent contractor at a comparable compensation level); or entering
into or becoming bound by any employment or consulting contract or legally
binding understanding or arrangement regarding such employment.
(iv) Employee Benefit Plans. The establishment, modification or
termination of any employee benefit plan or other fringe benefit.
(v) Liabilities. The incurrence or assumption of any liability for
money borrowed including, without limitation, notes, debentures, loans,
letters of credits (not including those letters of credit described in
Section 2.14(d)(v) of the Merger Agreement), financing or credit
agreements, agreements or commitments for future loans, credit or financing
or any other instrument or contract for money borrowed, and the guarantee
of any obligation of any person, firm or corporation, other than
obligations to suppliers in the ordinary course of business and consistent
with the budget of the Company.
(vi) Assets. The purchase or other acquisition, or the sale, lease,
exchange or other disposition, of assets other than in the ordinary course
of business not inconsistent with (i) the budget or business plan approved
by the Board or (ii) the 1998-2001 capital expenditure plan set forth in
Section 2.14(d) of the Disclosure Schedule to the Merger Agreement, as
adjusted in Section 2.14(d) of the Merger Agreement (it being understood
that expenditures shall not be deemed to be inconsistent with such capital
expenditure plan so long as the amount spent on any particular item is
within 10% of the amount allocated to such item in the plan and the
aggregate amount of expenditures on all items during such year is within
the aggregate amount provided for under the capital expenditure plan).
(vii) Loans. The lending or advancing of credit to any person, firm
or corporation, except the extension of credit to customers and advances to
employees, both in the ordinary course of business.
(viii) Settlement of Claims. The waiver, release, settlement or
compromise of any material claims or rights of the Company or which involve
a legal proceeding or governmental investigation, except claims of (i)
customers in the ordinary course of business consistent with policies
established by Xxxxx for its operating divisions and subsidiaries (and
communicated in writing to the Executive prior to the date first set forth
above) or (ii) suppliers in the ordinary course of business.
(ix) Xxxxx Policies. Any material variance from policies generally
established, from time to time, by Xxxxx for its operating divisions and
subsidiaries and communicated in writing (the "Xxxxx Policies"), it being
agreed that the Company shall (A) establish and implement such policies in
good faith, (B) to the extent practicable, use its reasonable best efforts
to communicate any proposed policies to the Executive reasonably in advance
of implementing them, and afford the Executive an opportunity to review and
comment upon such proposed policies and (C) not establish or implement
policies whose purpose or intended effect is to adversely affect the EBIT
of the Company.
(b) Full Working Time. During the Employment Period, the Executive shall
devote substantially all his full working time, attention and energies,
consistent with past practice, to the performance of his duties for the Company.
(c) Permitted Activities. Anything herein to the contrary notwithstanding,
subject to Section 9 hereof, nothing shall preclude the Executive from (i)
serving on the boards of directors of a reasonable number of other corporations
or the boards of a reasonable number of trade associations or charitable
organizations, (ii) engaging in charitable activities and community affairs, and
(iii) managing his personal investments and
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affairs, provided that the activities described in (i), (ii) and (iii) above do
not interfere with the proper performance of his duties and responsibilities
hereunder.
4. PLACE OF PERFORMANCE. The principal place of employment of the
Executive shall be consistent with the Executive's past practice or such other
location as may be agreed to by the Board and the Executive.
5. COMPENSATION AND RELATED MATTERS.
(a) Base Salary. As compensation for the performance by the Executive of
his duties hereunder, during the Employment Period the Company shall pay the
Executive a base salary at an annual rate of $850,000 (the "Base Salary"). The
Base Salary shall be payable in accordance with the Company's normal payroll
practices.
(b) Incentive Compensation.
(i) Commencing with respect to the last quarter in the Company's 1998
fiscal year and for each fiscal quarter thereafter during the Employment
Period, the Executive shall be eligible to receive a quarterly bonus (the
"Quarterly Bonus") of $162,500 (pro rated from the date of the Closing
until December 31, 1998, in the case of the Quarterly Bonus payable in
respect of the fourth quarter of 1998) if the Company's net sales in that
fiscal quarter exceeds its net sales in the corresponding quarter in 1997
(each, a "Quarterly Target"). Each Quarterly Bonus will be payable no later
than 5 days after the end of the applicable quarter. Notwithstanding the
foregoing, the Executive shall be entitled to a Quarterly Bonus in respect
of any quarter in which the Company fails to achieve the Quarterly Target
(a "Missed Quarter") if the Company's net sales for the fiscal year during
which the Missed Quarter occurs exceeds the Company's net sales for 1997.
Any Quarterly Bonus payable pursuant to the immediately preceding sentence
will be payable no later than ten (10) days after the end of the applicable
fiscal year. For purposes of calculating the Quarterly Bonus, the third
quarter of the Company's 1997 fiscal year shall be deemed to be the period
beginning July 1 and ending on September 26, and the fourth quarter of the
Company's 1997 fiscal year shall be deemed to be the period beginning
September 27 and ending on December 31.
(ii) Commencing with respect to the Company's 1998 fiscal year, the
Executive shall be eligible to receive annual bonuses payable upon the
Company's achievement of the applicable "EBIT" of the "Sun Division" (as
such terms are defined in the Merger Agreement) targets during the
Employment Period (each, an "Annual Bonus" and collectively, with the
Quarterly Bonus, the "Bonus" or "Bonuses" as the case may be), in
accordance with Attachment B hereto. Each Annual Bonus will be payable no
later than 30 days immediately following the completion of the audited
financial statements of Xxxxx for the applicable year. It is understood and
agreed that the EBIT of the Sun Division for 1998 shall include the
Predecessor's 1998 results of operations through the Closing Date.
(c) Expenses. During the Employment Period, the Company shall reimburse
the Executive for all reasonable and appropriate business expenses, upon
presentation of appropriate documentation to the Company.
(d) Vacation. During the Employment Period, the Executive shall be
entitled to such vacation as he deems reasonable on a basis consistent with his
past practice, provided that vacation time taken by the Executive does not
interfere with the proper performance of his duties and responsibilities
hereunder.
(e) Services Furnished. During the Employment Period, the Company shall
furnish the Executive with appropriate office space and such other facilities
and services as shall be suitable to the Executive's position and adequate for
the performance of his duties as set forth in Section 3 hereof.
(f) Other Benefits. During the Employment Period, the Executive shall be
eligible to participate in all tax-qualified defined contribution and defined
benefit retirement plans, and supplemental plans relating thereto, and welfare
plans and programs (including group life insurance, medical and dental
insurance, and accident and disability insurance) which are generally made
available to senior executives of the Company, as
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well as any benefits that are made generally available to senior executives of
the Company and Xxxxx during the Employment Period.
(g) Perquisites. During the Employment Period, the Company shall make
available to the Executive all perquisites that are made available to senior
executives of the Company, as well as any perquisites that are made generally
available to senior executives of the Company and Xxxxx during the Employment
Period. Without limiting the above, the Company shall provide the Executive with
a Company car and reimbursement of related expenses on a basis consistent with
past practice.
6. TERMINATION. The Executive's employment hereunder may be terminated as
follows:
(a) Death. The Executive's employment shall terminate upon his death, and
the last day of the month of his death shall be the Date of Termination.
(b) Cause. The Company may terminate the Executive's employment hereunder
for Cause. For purposes of this Agreement, the Company shall have "Cause" to
terminate the Executive's employment hereunder:
(i) upon the Executive's conviction for the commission of a felony; or
(ii) if, in carrying out his duties hereunder, the Executive engages
in conduct that constitutes willful misconduct or gross negligence, which
conduct, if curable, is not cured within 30 days after the written Notice
of Termination described below has been delivered by the Company; or
(iii) if the Executive breaches the covenants contained in Section 9
hereof, which breach is not cured within 30 days after the written Notice
of Termination described below has been delivered by the Company.
Cause shall not exist unless and until the Company has delivered to the
Executive a written Notice of Termination that specifically identifies the
events, actions, or non-actions, as applicable, that the Company believes
constitute Cause hereunder and, in the case of termination for Cause under
clause (ii) or (iii) above, the Executive has been provided with an opportunity
to be heard (with his counsel) within 30 days after the delivery of such notice.
The Date of Termination shall be the date specified in the Notice of
Termination; provided, however, that, in the case of a termination for Cause
under clause (ii) or (iii) above, the Date of Termination shall not be earlier
than 35 days after delivery of the Notice of Termination.
(c) Good Reason. The Executive may deliver written notice of his intention
to terminate his employment for "Good Reason" hereunder within sixty (60) days
after the Company's material breach of this Agreement, which breach, if curable,
has not been cured within 30 business days after written Notice of Termination
that specifically identifies the events, action, or non-actions, as applicable,
that the Executive believes constitute Good Reason hereunder has been given by
the Executive to the Company. In the event of a termination for Good Reason, the
Date of Termination shall be the date specified in the Notice of Termination,
which shall be no more than 35 days after the Notice of Termination.
(d) Other Terminations. If the Executive's employment is terminated
hereunder for any reason other than as set forth in Sections 6(a) through 6(c)
hereof, the date on which a Notice of Termination is given or any later date
(within 30 days) set forth in such Notice of Termination shall be the Date of
Termination.
(e) Notice of Termination. Any termination of the Executive's employment
hereunder by the Company or by the Executive (other than termination pursuant to
Section 6(a) hereof) shall be communicated by written Notice of Termination to
the other party hereto in accordance with Section 13 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
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7. COMPENSATION UPON TERMINATION.
(a) Death. If the Executive's employment hereunder is terminated as a
result of death, then:
(i) the Company shall pay the Executive's estate or designated
beneficiary, by no later than 30 days immediately following the Date of
Termination, the Executive's Base Salary and prorated Quarterly Bonus
through the Date of Termination, together with all compensation and
benefits payable to the Executive through the Date of Termination under the
terms of the Company's compensation and benefits plans, programs or
arrangements;
(ii) subject to the last paragraph of this Section 7(a), the Company
shall pay the Executive's estate or designated beneficiary, in a lump sum
payment paid by no later than 30 days immediately following the Date of
Termination, the Executive's Base Salary and Bonuses with respect to the
remainder of the Term. For the purpose of this Section 7(a), the Quarterly
Bonus shall be deemed to be $162,500, and the Annual Bonus shall be deemed
to equal the average Annual Bonus earned by the Executive in respect of the
two most recently completed fiscal years (unless the Executive's death
occurs before two fiscal years have been completed, in which case it shall
be deemed to equal the Annual Bonus (or similar annual bonus) earned by the
Executive in respect of the most recently completed fiscal year);
(iii) the Company shall pay the Executive's estate or designated
beneficiary, in a lump sum payment paid by no later than the 30 days
immediately following the Date of Termination, the Annual Bonus (calculated
in accordance with (ii) above) for the year in which the Date of
Termination occurs, prorated based upon the number of days during such year
the Executive was employed by the Company;
(iv) during the Employment Period, the Company shall maintain, at its
expense, life insurance policies on the life of the Executive sufficient to
meet its obligations under this Section 7(a) (the "Section 7(a)
Insurance"); and
(v) the Company shall have no additional obligations to the Executive
under this Agreement except to the extent otherwise provided in the
applicable plans and programs of the Company.
Notwithstanding anything to the contrary set forth in this Section 7(a),
the amounts under Section 7(a)(ii) shall be payable only if and to the extent
that (A) the Section 7(a) Insurance is in effect on the date hereof and (B) the
Executive has and shall have made no material misrepresentation in his
application for the Section 7(a) Insurance or any renewal thereof.
(b) Cause or By Executive other than for Good Reason. If the Executive's
employment hereunder is terminated by the Company for Cause or by the Executive
(other than for Good Reason), then:
(i) the Company shall pay the Executive by no later than 30 days
immediately following the Date of Termination, the Executive's Base Salary
and prorated Quarterly Bonus through the Date of Termination, together with
all compensation and benefits payable to the Executive through the Date of
Termination under the terms of the Company's compensation and benefits
plans, programs or arrangements; and
(ii) the Company shall have no additional obligations to the Executive
under this Agreement except to the extent otherwise provided in the
applicable plans and programs of the Company.
(c) Termination by Company without Cause or by the Executive for Good
Reason. If the Executive's employment hereunder is terminated by the Company
(other than for Cause) or by the Executive for Good Reason, then:
(i) the Company shall pay the Executive, by no later than the date
indicated in (ii) below, the Executive's Base Salary and prorated Quarterly
Bonus through the Date of Termination, together with all compensation and
benefits payable to the Executive through the Date of Termination under the
terms of the Company's compensation and benefits plans, programs or
arrangements;
(ii) the Company shall pay to the Executive the Executive's Base
Salary and Bonuses (calculated in the manner set forth in Section 7(a)(ii)
above) for the remainder of the Term. A lump sum payment
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of such Base Salary and Bonus with respect to each six-month period of the
remainder of the Term shall be made by no later than the first day of such
six-month period;
(iii) the Company shall pay the Executive, in a lump sum payment paid
by no later than 30 days immediately following the Date of Termination, the
Annual Bonus (calculated in accordance with Section 7(a)(ii) above) for the
year in which the Date of Termination occurs, prorated based upon the
number of days during such year the Executive was employed by the Company;
(iv) during the remainder of the Term (or, if earlier, until
equivalent benefits are made available to the Executive at no cost by a
subsequent employer), the Executive shall continue to participate in all
employee welfare benefit plans and programs in which the Executive was
entitled to participate immediately prior to the Date of Termination in
accordance with the terms of such plans and programs as in effect from time
to time; provided that the Executive's continued participation is permitted
under the general terms and provisions of such plans and programs. In the
event that the Executive's participation in any such plan or program is
barred, the Company shall provide the Executive and his dependents at the
Company's cost with benefits substantially similar to those which the
Executive and his dependents would otherwise have been entitled to receive
under such plans and programs from which their continued participation is
barred; and
(v) the Company shall have no additional obligations to the Executive
under this Agreement, except to the extent otherwise provided in the
applicable plans and programs of the Company.
(d) Time of the Essence. With respect to any payments to be made or
benefits to be provided by the Company to the Executive pursuant to this Section
7, time is of the essence.
8. MITIGATION. Except as set forth in Section 7(c)(iii), the Executive
shall not be required to mitigate amounts payable pursuant to Section 7 hereof
by seeking other employment or otherwise, nor shall there be any offset against
such payments on account of (a) any remuneration attributable to any subsequent
employment or self-employment or (b) any claims which the Company may have
against the Executive.
9. NON-COMPETE. In connection with the transfer of the Executive's
interest in the Company pursuant to the Merger Agreement, the Executive hereby
agrees as follows:
(a) Non-Competition. The Executive shall not, whether as an officer,
director, owner, employee, partner, investor, agent, shareholder,
consultant who receives remuneration of any kind, or advisor who receives
remuneration of any kind, directly or indirectly, engage in any of the
Businesses then actually conducted by the Company and its affiliates during
the Non-Compete Period. The Non-Compete Period shall mean the period
beginning the date hereof and ending two (2) years after the end of the
Term; provided, however, that in the event that (i) the Company agrees that
such termination was without Cause or for Good Reason; or (ii) an
arbitration tribunal or court of competent jurisdiction renders a final and
non-appealable decision finding that the Company terminated the
Executives's employment without Cause or that the Executive terminated his
employment for Good Reason, the Non-Compete Period shall mean the period
beginning the date hereof and ending two (2) years after the Date of
Termination.
(b) Non-Interference. For the one (1) year period following the
Non-Compete Period (the "Non-Interference Period"), the Executive shall
not, directly or indirectly, (A) solicit the employment of, interfere or
negotiate with or endeavor to entice away from the Company or its
affiliates or hire any persons who are then employees or have been
employees during the prior six months of the Company or its affiliates, or
(B) recommend or support a decision by any person, firm, corporation,
association or other entity to solicit (except by means of advertisement in
newspapers of general circulation) the employment of, interfere or
negotiate with or endeavor to entice away from the Company or its
affiliates or hire any persons who are then employees of the Company or its
affiliates.
(c) Exception. Anything herein to the contrary notwithstanding,
nothing contained in this Section 9 shall prohibit the Executive from
holding, as a passive owner, less than 5% of the outstanding shares of, or
any other equity interest in, an entity engaged in a business which is the
same as the Businesses or any segment thereof.
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(d) "Businesses". As used in this Agreement, the term "Businesses" shall
mean (I) the manufacture or finishing in the United States or Mexico of jeans,
jeanswear and casual tops and bottoms, or (II) the sale, at wholesale, in the
United States or Canada of jeans, jeanswear, casual tops and bottoms and
sportswear, or (III) the sale or blending for sale of detergents, chemicals and
enzymes of all kinds for use by the garment finishing industry in the United
States or Mexico, or (IV) any other business then actually carried on by the
Company and its affiliates.
(e) Confidentiality.
(i) Except as required by law, regulation, subpoena, or court
order, the Executive shall not disclose any confidential or proprietary
information relating to the Businesses, the Company and its affiliates
to any person, firm, corporation, association or other entity, nor shall
the Executive make use of any such confidential or proprietary
information for his own purpose, except to enforce this Agreement or the
Merger Agreement, or for the benefit of any person, firm, corporation,
association or other entity.
(ii) For purposes hereof, the term "confidential or proprietary
information" shall mean all confidential or proprietary information
which is presently known to the Executive or becomes known to the
Executive while he is employed by the Company concerning the Businesses,
the Company and its affiliates but shall not include any information
which at the time of its disclosure is in the public domain, which is
required by law to be disclosed or which is generally known to persons
within the industry in which the Company and its affiliates operate;
provided such information did not enter the public domain or become
known to persons by reason of Executive's breach of these provisions.
(f) Remedies. The Executive acknowledges and agrees that the restrictions
contained in this Section 9 are a material inducement for the Company to enter
into this Agreement and the Merger Agreement, and that such restrictions are
reasonable and necessary to protect the legitimate interests of the Company and
its affiliates, including the goodwill of the Predecessor being acquired by the
Company under the Merger Agreement simultaneously herewith. Therefore, in the
event of a breach or threatened breach of this Section 9, the Company shall be
entitled to injunctive relief in a court of appropriate jurisdiction to remedy
any such breach or threatened breach, the Executive acknowledging that damages
would be inadequate and insufficient. Moreover, if it shall be determined by any
arbitration panel or court of competent jurisdiction that any covenant herein is
not enforceable due to its geographic area or duration, the Executive agrees
that such covenant shall be enforceable to the greatest extent possible, and
will be deemed amended so as to reduce the geographic area or duration, as the
case may be, to the extent necessary to secure enforceability.
(g) Continuing Operation. Any termination of the Executive's employment or
of this Agreement shall have no effect on the continuing operation of this
Section 9.
(h) Nondisparagement by the Company. For the longer of the Non-Compete
Period and a period of three years immediately following the Date of
Termination, (i) the Company and its affiliates shall not disparage the
Executive and (ii) the Executive shall not disparage the Company and its
affiliates, their officers or directors.
10. INDEMNIFICATION. The Company shall indemnify the Executive to the
full extent authorized by law and the Charter and By-laws of the Company and
Xxxxx for all expenses, costs, liabilities and legal fees which the Executive
may incur in the discharge of all his duties hereunder. The Executive shall be
insured under the Company's and Xxxxx' Directors' and Officers' Liability
Insurance Policy as in effect from time to time. Any termination of the
Executive's employment or of this Agreement shall have no effect on the
continuing operation of this Section 10.
11. SUCCESSORS; BINDING AGREEMENT.
(a) Company's Successors. No rights or obligations of the Company under
this Agreement may be assigned or transferred by the Company except that such
rights or obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity, or the sale or
liquidation of all or substantially all of the business or assets of the Company
or Xxxxx, provided that the
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assignee or transferee is the successor to all or substantially all of the
business or assets of the Company and such assignee or transferee assumes the
liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law. The Company will require
any such successor to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business or assets as aforesaid which executes and delivers the agreement
provided for in this Section 11 or which otherwise becomes bound by all the
terms and provisions of this Agreement or by operation of law.
(b) Executive's Successors. This Agreement shall not be assignable by the
Executive. This Agreement and all rights of the Executive hereunder shall inure
to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. Upon the Executive's death, all amounts to which he is
entitled hereunder, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's devisee, legatee,
or other designee or, if there be no such designee, to the Executive's estate.
12. ABSENCE OF RESTRICTIONS. The Executive represents and warrants that
he is not a party to any agreement or contract pursuant to which there is any
restriction or limitation upon his entering into this Agreement or performing
the services called for by this Agreement.
13. NOTICE. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
Xxxx X. Xxxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxx X. Xxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
If to the Company:
c/o Jones Apparel Group, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
14. INTEREST ON LATE PAYMENTS. "Undisputed Late Obligations" shall bear
interest beginning on the Due Date (defined below) until paid in full at an
annual rate of one percent (1.0%) plus the prime rate as declared from time to
time by the Chase Manhattan Bank. For purposes hereof, "Undisputed Late
Obligations" shall mean any obligation which remains unpaid 5 days after written
notice thereof is delivered to the other party in accordance with Section 13
(the "Due Date") for monies under this Agreement owing from one party to
another, which obligation (i) is not subject to any bona fide dispute or (ii)
has been adjudicated by an arbitration panel or court of competent jurisdiction
to be due and payable.
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15. MISCELLANEOUS. No provision of this Agreement may be modified unless
such modification is agreed to in writing signed by the Executive and an officer
of the Company duly authorized by the Board. Any waiver or discharge must be in
writing and signed by the Executive or an authorized officer of the Company, as
the case may be. No waiver by either party hereto at any time of any breach by
the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of New York without
regard to its conflicts of law principles.
16. ARBITRATION. Except as otherwise provided herein, all controversies,
claims or disputes arising out of or related to this Agreement shall be settled
under the rules of the American Arbitration Association then in effect in the
State of New York, as the sole and exclusive remedy of either party, and
judgment upon such award rendered by the arbitrator(s) may be entered in any
court of competent jurisdiction.
17. ATTORNEYS' FEES. The Company shall reimburse the Executive (or the
Executive shall reimburse the Company) for all reasonable costs, including
without limitation reasonable attorneys' fees of the Executive (or the Company,
as the case may be,) in any dispute, arbitration or proceeding arising under
this Agreement (collectively, a "Proceeding") so long as the Executive (or the
Company, as the case may be,) "prevails in substantial part" with respect to his
or its claims or defenses in such Proceeding. For purposes hereof, the Executive
shall be deemed to have "prevailed in substantial part" if (i) the Executive is
the party originally demanding a Proceeding, the arbitrator(s) shall have
awarded the Executive at least 75% of the amount originally demanded by the
Executive, or (ii) the Company is the party originally demanding a Proceeding,
the arbitrator(s) shall have denied the Company the relief originally requested.
The Company shall be deemed to have "prevailed in substantial part" if (i) the
Executive is the party originally demanding a Proceeding and the arbitrator(s)
shall have awarded the Executive 25% or less of the amount originally demanded
by the Executive or (ii) the Company is the party originally demanding a
Proceeding and the arbitrator(s) shall have granted the Company the relief
originally requested.
18. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
19. CONFLICT WITH XXXXX POLICIES. In the event that any term or condition
set forth in this Agreement shall conflict with any of the Xxxxx Policies, the
terms of this Agreement shall govern and be controlling.
20. ENTIRE AGREEMENT. This Agreement between the Company and the
Executive sets forth the entire agreement of the parties hereto in respect of
the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or
warranties, whether oral or written, by the parties hereto in respect of the
subject matter contained herein; and any prior agreement of the parties hereto
in respect of the subject matter contained herein is hereby terminated and
canceled. Notwithstanding anything herein to the contrary, the Merger Agreement
and the Registration Rights Agreement executed in connection therewith shall
remain in full force and effect in accordance with their respective terms and
shall be unaffected hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date first above written.
SAI ACQUISITION CORP.
By:
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Name: Xxxx X. Xxxxxxxx
Title:
9
