Exhibit 10.65
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), is
made as of January 1, 2002, by and among Xxxxxx X. Xxxx (the "Executive"),
Donnkenny Apparel, Inc., a Delaware corporation (the "Company"), and Donnkenny,
Inc., a Delaware corporation which is the parent corporation of the Company
("Donnkenny").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive, the Company and Donnkenny entered into that certain
Employment Agreement dated as of January 1, 2000, pursuant to which Executive
was employed as Chairman of the Board and Chief Executive Officer of the Company
and each of its subsidiaries as well as in the capacity of Chief Executive
Officer of Donnkenny (the "Employment Agreement") for a term which commenced
January 1, 2000 and which expires December 31, 2002; and
WHEREAS, pursuant to the First Amendment to Employment Agreement dated
May 17, 2000 the Employment Agreement was amended in certain respects; and
WHEREAS, the parties to the Employment Agreement deem it to be in their
mutual best interests to amend and restate the Employment Agreement in certain
respects in recognition of the desire of the parties to extend the term thereof
and to otherwise solidify their respective relationships on a long-term basis.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, effective immediately the
Employment Agreement is hereby amended and restated as follows:
1. Employment.
a. Position. On the terms and subject to the conditions set
forth herein, the Company hereby employs the Executive as its Chairman
of the Board and Chief Executive Officer throughout the Employment Term
(as defined below). In addition, the Company shall continue to cause
each of its subsidiaries to designate Executive to the offices of
Chairman of the Board and Chief Executive Officer throughout the
Employment Term. Donnkenny hereby designates Executive as its Chief
Executive Officer throughout the Employment Term and agrees that during
the Employment Term, it shall (i) nominate the Executive for election
to its Board of Directors at each annual meeting of shareholders and
use its best efforts to cause the Executive to be duly elected to the
Board at each such meeting, and (ii) elect the Executive to the
position of Chairman of the Board.
b. Duties and Responsibilities. The Executive shall have such
duties and responsibilities consistent with his position as the Board
determines and shall perform such duties and carry out such
responsibilities to the best of his ability for the purpose of
advancing the business of the Company and its subsidiaries and
Donnkenny. Subject to the provisions of Section 1.c. below, and
excluding any periods of vacation and sick leave to which Executive is
entitled, during the Employment Term the Executive shall devote his
full business time, skill and attention to the business of the Company
and its subsidiaries and Donnkenny, and, except as specifically
approved by the Board, shall not engage in any other business activity
or have any other business affiliation. During the Employment Term,
Executive shall report directly to the Board and all other executive
officers of Donnkenny, the Company or any of its subsidiaries shall
report to the Executive. The Executive shall not be required to perform
the principal duties of his employment outside of the New York, New
York metropolitan area without the prior written consent of the
Executive, which may be delayed or withheld by Executive in his sole
discretion.
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c. Other Activities. Notwithstanding anything else to the
contrary set forth herein, Executive shall have the right to manage his
personal investments and, as part of the Executive's business efforts
and duties on behalf of Donnkenny, the Company or any of its
subsidiaries, Executive may participate fully in social, charitable and
civic activities and may serve on the boards of directors of other
companies provided that such activities do not unreasonably and
materially interfere with the performance of and do not involve a
conflict of interest with his duties or responsibilities hereunder and
provided that the serving on boards of directors of other companies
shall require the prior approval of the Board of Directors of
Donnkenny. Donnkenny and the Company each acknowledge that Executive
serves as of the date hereof as a director of Whitehall Jewelers, Inc.,
which service is hereby approved.
2. Employment Term. Subject to the termination provisions of Section 5
hereof, the "Employment Term" hereunder shall be an ongoing and continuous
period of three (3) years, commencing on January 1, 2002, with the result that
each day subsequent to January 1, 2002 shall, without further action or notice
of any kind by any party hereto, be deemed to automatically extend the term
hereof by one day so that, at all times hereafter, the remaining term hereof
shall be deemed to be three (3) years.
3. Compensation. During the Employment Term, the Company will pay
and/or otherwise provide the Executive with compensation and related benefits as
follows:
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a. Base Salary. During the year of the Employment Term ending
December 31, 2002, the Company agrees to pay the Executive, for
services rendered hereunder, a base salary at the annual rate of Eight
Hundred Fifty Thousand Dollars ($850,000) (the "Base Salary").
Commencing January 1, 2003 and on each January 1 thereafter during the
Employment Term, the base salary which was in effect on the immediately
preceding December 31 shall be increased by the greater of (i) the
percentage increase in the Cost of Living Index (as hereafter defined);
or (ii) such higher rate as the Compensation Committee of the Board
(the "Compensation Committee") may designate in its sole and absolute
discretion (the adjusted base salary shall be deemed the effective
"Base Salary" hereunder). The Base Salary shall be payable in equal
periodic installments, not less frequently than monthly, less any sums
which may be required to be deducted or withheld under applicable
provisions of law. The Base Salary for any partial year shall be
prorated based upon the number of days elapsed in such year. For
purposes hereof, the Cost of Living Index shall mean the December 2001
Revised Consumer Price Index ("CPI") for all Urban Consumers published
by the Bureau of Labor Statistics of the United States Department of
Labor, for New York City Metropolitan Area Average, All Items. If the
manner in which the CPI is calculated shall be substantially revised,
Executive and the Company shall select a means to adjust such revised
Index which would produce results equivalent, as practicable, to those
which would have been obtained if the CPI has not been so revised. If
the CPI shall become unavailable to the public because publication is
discontinued, or otherwise, Executive and the Company shall select a
comparable substitute index based upon changes in the cost of living or
purchasing power of the consumer dollar published by any other
governmental agency, or, of no such index shall then be available, a
comparable index published by a major bank or other financial
institution or by a university or a recognized financial publication.
In the event that the U.S. Department of Labor, Bureau of Labor
Statistics, changes the publication frequency of the CPI so that a CPI
is not available to make an adjustment for the period in question, the
adjustment shall be based on the percentage increase in the CPI for the
twelve (12) month period beginning with the closest month preceding the
period in question for which a CPI is available.
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b. Bonus. During the Employment Term, Executive shall
participate in any bonus plan that includes senior executives of the
Company on the terms generally set forth in such plan from time to
time, or in any plan substituted therefor or in addition thereto.
c. Stock Options and Restricted Stock. Prior to the date
hereof, the Compensation Committee of Donnkenny granted to the
Executive options to purchase 37,500 shares of Donnkenny Common Stock
pursuant to the Donnkenny's Inc. 1992 Stock Option Plan (the "Stock
Option Plan"), with the purchase price upon exercise of such options
equal to $2.75 per share i.e. the closing price of the Common Stock on
the date of such grant, all of which options are vested. (Said
Donnkenny options and exercise price reflect the four for one reverse
stock split effective April 20, 2001).
In the event the Compensation Committee of Donnkenny shall
grant to the Executive any additional awards of restricted shares of
the Common Stock of Donnkenny, or additional options to purchase shares
of Donnkenny Common Stock, then with respect to the options, such
options shall remain exercisable during the remainder of their
respective terms notwithstanding any termination of the Executive's
employment except as otherwise provided in the grant agreements
respecting such options; provided, however, that, anything herein or in
the grant agreements to the contrary notwithstanding, the vesting of
such shares of restricted stock and such options shall be accelerated
in the event of a Change in Control (as defined herein), a termination
of Executive's employment by the Company without Cause (as defined
below), a termination of Executive's employment for Good Reason (as
defined below), or a termination of Executive's employment as a result
of the death or disability of Executive. With respect to the options,
such options shall be incentive stock options to fullest extent
permitted by applicable law and the Stock Option Plan.
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In the event there shall be a Change in Control, all shares of
common stock of Donnkenny previously or subsequently issued to
Executive as restricted shares or pursuant to stock options upon the
vesting thereof from time to time shall be promptly and duly registered
and fully and freely tradeable by Executive without restriction at the
sole cost and expense of the Company. In the event Executive shall
require a resale prospectus in connection with any intended sale of
shares, Donnkenny and the Company shall promptly furnish such resale
prospectus to Executive at the Company's expense.
d. Automobile Allowance. During the Employment Term the
Company shall provide to Executive an automobile which is reasonably
acceptable to him and which is consistent with his position with the
Company, and a driver. In addition, the Company shall be responsible
for the payment of (i) all of Executive's automobile expenses
including, without limitation, gasoline, tolls, insurance, parking,
maintenance, repairs and similar expenses, and (ii) the federal, state
and local income taxes for which Executive is liable on account of the
payments or other benefits referred to in this Section 3d above,
together with an amount sufficient to satisfy any additional federal,
state or local income taxes for which Executive is liable on account of
the amounts received pursuant to this Section 3d, all of which shall be
payable within fifteen (15) days after demand therefor by Executive.
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e. Reimbursement of Expenses and Administrative Support. The
Company shall pay or reimburse the Executive, upon the presentation of
appropriate documentation of such expenses, for all reasonable travel
and other expenses incurred by the Executive in performing his
obligations under this Agreement. The Company further agrees to furnish
the Executive with office space and administrative support, and any
other assistance and accommodations as shall be consistent with past
practices in the performance of his duties under this Agreement.
f. Vacation. Executive shall be entitled to four (4) weeks
paid vacation in each calendar year. Any vacation for the current year
to which Executive is entitled and which has not been fully taken by
Executive at the time his employment with the Company shall terminate
for any reason, shall be fully paid to Executive within thirty (30)
days after the effective date of Executive's termination of employment.
g. Financial Planning and Tax Preparation Services. Each
year during the Employment Term, the Company shall pay or reimburse
Executive for financial planning services and tax preparation
services provided to Executive in an amount not to exceed Ten Thousand
Dollars ($10,000.00), which amount shall be payable upon submission of
appropriate documentation.
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h. Deductions. All payments made under this Agreement
shall be subject to such deductions at the source as from time to
time may be required to be made pursuant to any law, rule, regulation
or order.
i. Change in Control. For purposes of this Agreement, a
"Change in Control" of the Company or Donnkenny shall be deemed to
have occurred upon any of the following events:
(A) A person or entity or group of persons or
entities, acting in concert, shall become the direct or
indirect beneficial owner (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934, as amended), of
securities of the Company or Donnkenny representing more than
fifty percent (50%) of the combined voting power of the issued
and outstanding common stock of Donnkenny or the Company; or
(B) The majority of the Board, or the majority of the
board of directors of Donnkenny, is no longer comprised of the
incumbent directors who constitute such board on the date of
this Agreement and any other individual(s) who becomes a
director subsequent to the date of this Agreement whose
initial election or nomination for election as a director, as
the case may be, was approved by at least a majority of the
directors who comprised the incumbent directors as of the date
of such election or nomination or subsequently elected
directors elected by directors elected by incumbent directors;
provided however, that in determining whether a director has
been so elected by the incumbent directors or their
successors, a person who has been so elected by reason of
having made an investment in the Company or Donnkenny or by
reason of a transaction agreement with Donnkenny or the
Company, or otherwise in connection with any Change in Control
transaction with Donnkenny or the Company, shall not be deemed
to have been elected by incumbent directors or their
successors; or
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(C) The Board shall approve a sale of all or
substantially all of the assets of the Company, or the board
of directors of Donnkenny shall approve a sale of all or
substantially all of the assets of Donnkenny; or
(D) The Board, or the board of directors of
Donnkenny, shall approve any merger, consolidation, or like
business combination or reorganization of the Company, or of
Donnkenny, the consummation of which would result in the
occurrence of any event described in clause (A) or (B) above,
and such transaction shall have been consummated.
4. Participation in Benefit Plans. The Executive shall be entitled to
participate, during the term of this Agreement, in the Company's and Donnkenny's
benefit programs, including but not limited to qualified or non-qualified
pension plans, other qualified or nonqualified retirement plans, supplemental
pension plans, group hospitalization, health, dental care, death benefit,
post-retirement welfare plans, or other present or future group employee benefit
plans or programs of the Company or Donnkenny for which key executives are or
shall become eligible (collectively, the "Benefit Plans"), on the same terms as
other key executives of the Company or Donnkenny, as the case may be. If
participation in any of such Benefit Plans is subject to or based on length of
service, the Executive, upon execution of this Agreement, shall be credited with
the greater of (i) ten (10) years of service, or (ii) whatever number of years
or period of service shall be required in order for
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Executive to immediately commence participation therein at any
time hereafter. In addition to and without limiting the generality of the
foregoing, (i) the Company may obtain and maintain a "key man" life insurance
policy under which the Company is the named beneficiary in the amount of
$2,500,000, and (ii) the Executive may obtain and maintain, at the sole expense
of the Company, life insurance policy with a death benefit of not more than
$2,500,000, which policy shall be owned by the Executive or his designee and
payable to Executive's designated beneficiary, and/or may be a joint life
insurance policy providing for payment upon the last to die of Executive and
Executive's spouse, in each case from a nationally-recognized insurance carrier
reasonably acceptable to the Executive, and (iii) the Company shall use its
reasonable best efforts to provide, in addition to any such insurance regularly
provided to the Company's executives and/or employees, long-term disability
insurance which will pay to Executive at least sixty percent (60%) of
Executive's then current Base Salary until the Executive reaches age 65. Upon
termination of the employment of the Executive with the Company for any reason,
the Executive shall be entitled to purchase from the Company any life insurance
policy then owned by the Company on the life of the Executive and the
aforementioned disability insurance policy (if permitted under the terms of such
policy) for a purchase price equal to the cash surrender value of each policy,
if any (net of any loans or other reductions in value chargeable upon such
surrender). The Company may not borrow against any life insurance policy owned
by the Company on the life of the Executive, or pledge or otherwise encumber
said policy or the death benefit payable thereunder without the prior written
consent of Executive, which consent may be delayed or withheld in the
Executive's sole discretion. The Company shall be responsible for the federal,
state and local income taxes for which Executive is liable on account of the
payment by the Company of the premiums for the maintenance of the
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benefits referred to in this Section 4 above, together with an amount sufficient
to satisfy any additional federal, state or local income taxes for which
Executive is liable on account of the tax reimbursement amounts received
pursuant to this Section 4, all of which shall be payable within fifteen (15)
days after demand therefor by Executive.
5. Termination of Employment.
a. By the Company For Cause. The Company may terminate the Executive's
employment under this Agreement at any time for Cause (as defined below) by
delivery of written notice of termination to the Executive (which notice shall
specify in reasonable detail the basis upon which such termination is made and
the specific provision(s) of the Agreement upon which it relies, and further
stating the date, time and place of the special meeting of the Board or the
Board of Directors of Donnkenny at which the issue of Cause shall be addressed)
at least ten days prior to the termination date set forth in such notice. No
such termination shall become effective until the Executive, after receipt of
such notice, shall have been offered the opportunity to attend a meeting of the
Board of Directors of the Company (or the Board of Directors of Donnkenny,
whichever is applicable) at which a quorum is present (with the Executive's
counsel present and participating, if desired by the Executive) regarding such
termination notice and the allegations set forth therein and, based upon such
meeting, such Board of Directors shall have elected to proceed with such
termination. Except as provided for in Section 22 below, in the event the
Executive's employment is terminated for Cause, all provisions of this Agreement
and the Employment Term shall be terminated; provided, however, that such
termination shall not divest the Executive of any previously vested benefit or
right. In addition, the Executive shall be entitled only to payment of his
earned and unpaid Base Salary to the date of termination, earned and unpaid
bonus for the prior fiscal year,
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additional salary payments in lieu of the Executive's accrued
and unused vacation, unreimbursed business and entertainment expenses in
accordance with the Company's policy, and unreimbursed medical, dental and other
employee benefit expenses incurred (including any tax gross-up payments required
hereunder), and other vested and accrued benefits payable in accordance with the
Company's or Donnkenny's employee benefit plans (hereinafter referred to as the
"Standard Termination Payments"). For purposes of this Agreement, "Cause" means
(1) the conviction of the Executive for the commission of (A) any felony, or (B)
a misdemeanor involving moral turpitude, or (2) willful misconduct or neglect of
duties by the Executive that results in material and demonstrable damage to the
business or reputation of the Company or (3) Executive's repeated failure to
follow a written company policy previously delivered to Executive, or (4)
Executive's alcohol or drug abuse. No act or failure to act on the part of the
Executive shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any act
or failure to act that is based upon authority given pursuant to a resolution
duly adopted by the Board or the Board of Directors of Donnkenny, or the written
advice of counsel for the Company or Donnkenny, shall be conclusively presumed
to be done, or omitted to be done, by the Executive in good faith and in the
best interests of the Company.
b. Upon Death or Disability. If the Executive dies, all
provisions of this Agreement (other than rights or benefits arising as
a result of such death) and the Employment Term shall be automatically
terminated; provided, however, that the Standard Termination Payments
and pro rata Bonus for the fiscal year during which such death occurs
shall be paid to the Executive's surviving spouse or, if none, his
estate, and the death benefits
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under the Company's and Donnkenny's employee benefit plans shall be
paid to the Executive's beneficiary or beneficiaries as properly
designated in writing by the Executive. If the Executive is unable to
perform his responsibilities under this Agreement by reason of
physical or mental disability or incapacity and such disability or
incapacity shall have continued for six consecutive months or any
period aggregating six months within any 12 consecutive months (a
"Disability'), the Company may terminate this Agreement and the
Employment Term at any time thereafter. In such event, the Executive
shall be entitled to receive his normal compensation hereunder during
said six (6) month period, and shall thereafter be entitled to receive
the Standard Termination Payments and the pro rata Bonus for the
fiscal year during which such disability occurs. Pro rata Bonus, in
the event of the Executive's death or disability, shall be an amount
equal to the Bonus at the amount payable upon fully achieving the
figure targeted in the annual business plan or other documents
relating to the Bonus approved by the Board, the Compensation
Committee or any other duly authorized designee of the Board for such
year (the "Target Amount") (regardless of the Company's actual
performance) for the fiscal year during which such death or disability
occurs, prorated by a fraction, the numerator of which is the number
of days of employment elapsed during the fiscal year prior to
termination of employment and the denominator of which is 365. A
termination of the Executive's employment by the Company for
Disability shall be communicated to the Executive by written notice,
and shall be effective on the 30th day after receipt of such notice by
the Executive (the "Disability Effective Date"), unless the Executive
returns to full-time performance of the Executive's duties before the
Disability Effective Date.
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The Company shall continue to provide the Executive and the
spouse and dependents of the Executive, at the expense of the Company,
with the medical insurance then provided to Executive and to such
spouse and dependents including, without limitation, the Company's
Execucare Program or any addition thereto or substitution therefor, for
a period of five (5) years following the termination of the employment
of the Executive, which medical insurance coverage shall be included as
part of any required COBRA Coverage; provided, however, that the
Company provided medical coverage and the COBRA Coverage shall
terminate with respect to the Executive, the spouse and/or dependents
of the Executive as of the date that any such individual becomes
eligible to receive coverage and benefits as a full time employee under
any plans, programs and/or arrangements of a subsequent employer of
Executive. Availability for coverage as a spouse, principal or director
of a company shall not be treated as eligibility for coverage. Subject
to the provisions of this Agreement, which shall control in the event
of any conflicting provisions, the rights and benefits of the Executive
under the benefit plans and programs of the Company shall be determined
in accordance with the provisions of such plans and programs. The
rights and benefits of the Executive with respect to the shares of
restricted stock and options referred to in Section 3.c. above shall be
determined in accordance with the provisions of this Agreement and the
plans and grant agreements governing such shares and options. Except as
otherwise specified in this Agreement, neither the Executive nor the
Company shall have any further rights or obligations under this
Agreement.
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c. By the Company Without Cause.
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i. The Company may only terminate the employment of the
Executive for Cause or upon the death or Disability of the Executive.
If the employment of the Executive shall be terminated without Cause
prior to a Change in Control and other than as a result of death or
Disability of the Executive, then the Executive shall be entitled to
the payments, rights and benefits set forth in Section 5.d.v. below.
d. By the Executive.
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i. The Executive may terminate his employment, and
any further obligations which Executive may have to perform
services on behalf of Donnkenny or the Company and any of its
subsidiaries hereunder at any time after the date hereof, (i)
without Good Reason (as defined below) by sending written
notice of such termination to the Company not less than sixty
(60) days prior to the effective date of such termination
(during such sixty (60) day period, the Executive shall
continue to perform the normal duties of his employment
hereunder and shall be entitled to receive when due all
compensation and benefits applicable to the Executive
hereunder); or (ii) for Good Reason pursuant to the procedure
set forth in Section 5(d)iii below).
ii. For purposes of this Agreement, "Good Reason" shall be
defined as any of the following:
A. failure by the Company or Donnkenny to
re-elect the Executive as a director, Chairman of the
Board and Chief Executive Officer, or the assignment
to the Executive of any duties or responsibilities
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inconsistent in any respect with those customarily
associated with the positions to be held by the
Executive pursuant to this Agreement, or any other
action by the Company that results in a diminution in
the Executive's position, authority, duties or
responsibilities, other than an isolated,
insubstantial and inadvertent action that is not
taken in bad faith and is remedied by the Company
promptly after receipt of notice thereof from the
Executive;
B. any failure by the Company or Donnkenny
to comply with any provision of Section 3 of this
Agreement, other than an isolated, insubstantial and
inadvertent failure that is not taken in bad faith
and is remedied by the Company or Donnkenny, as the
case may be, promptly after receipt of notice thereof
from the Executive;
C. Any requirement by the Company that the
Executive's services be rendered primarily at a
location or locations other than in New York City;
D. any purported termination of the
Executive's employment by the Company or Donnkenny
for a reason or in a manner not expressly permitted
by this Agreement;
E. any failure by the Company or Donnkenny
to comply with Section 11 of this Agreement;
F. any Change in Control of the Company or
Donnkenny;
G. the institution of bankruptcy,
reorganization, arrangement, insolvency or
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liquidation proceedings by or against the Company or
Donnkenny (which proceedings, if instituted against
the Company or Donnkenny, have been consented to by
the Company or Donnkenny, as the case may be, or have
remained undismissed for a period of sixty (60) days
after the filing date thereof); or
H. any other material breach of this
Agreement by the Company or Donnkenny that either is
not taken in good faith or is not remedied by the
Company or Donnkenny, as the case may be, within
twenty (20) business days after receipt of notice
thereof from the Executive; provided, however, that
with respect to any breach of a payment obligation of
the Company or Donnkenny, such breach must be
remedied within five (5) business days after written
notice thereof from the Executive.
iii. A termination of employment by the Executive for
Good Reason shall be effectuated by giving the Company written
notice ("Notice of Termination for Good Reason") of the
termination, setting forth in reasonable detail the specific
conduct of the Company or Donnkenny or other event(s) that
constitutes Good Reason and the specific provision(s) of this
Agreement on which the Executive relies; such notice to be
provided within 90 days of such alleged conduct or other
event. A termination of employment by the Executive for Good
Reason shall be effective on the fifth business day following
the date when the Notice of Termination for Good Reason is
given, unless the notice sets forth a later date (which date
shall in no event be later than thirty (30) days after the
notice is given). Upon the occurrence of a termination of
employment by the Executive for Good Reason prior to the
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Change of Control, the Company shall pay to the Executive the
Standard Termination payments and the Additional Termination
payments.
iv. If the Executive shall elect to terminate his
employment hereunder (other than as a result of his death or
disability) without Good Reason, then the Executive shall
remain vested in all vested benefits provided for hereunder or
under any benefit plan of the Company in which Executive is a
participant and shall be entitled to receive the Standard
Termination payments, but the Company shall have no further
obligation to make payments or provide benefits to the
Executive.
v. Subject to the provisions of Section 0.x.xx.
below, if the Company terminates the Executive's employment,
other than for Cause, death or Disability, or the Executive
terminates employment for Good Reason, the Company shall, at
the option of the Company, (i) continue to pay to the
Executive an amount which is equal to the sum of (x) the
aggregate Base Salary Executive would have been entitled to
receive during the thirty six (36) month period following such
termination (assuming, for these purposes, that Executive
would have remained in the full and continuous employment of
the Company during such thirty six (36) month period and that
Base Salary shall not increase above the rate in effect at the
date of termination); and (y) a one time payment which is
equal to the maximum Bonus payable to Executive upon fully
achieving the figure targeted in the annual business plan or
other documents relating to the Bonus approved by the Board,
the Compensation Committee or any other duly authorized
designee of the Board for the year in which such termination
occurs (regardless of the Company's actual
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performance) or, in the event no such figure shall be
targeted for such year, for the most recent year with
respect to which such figure was targeted (the sum of (x)
and (y) are hereinafter collectively referred to as the
"Additional Termination Payments") when same would otherwise
be due and payable in the ordinary course of business
assuming, for these purposes, that Executive remained in the
full time continuous employment of the Company during such
period; provided however, that the Company shall only be
entitled to elect this continued payment option if, on or
before the effective termination date, the Company, at its
expense, has delivered to Executive a bank letter of credit
in an amount equal to the aggregate payments to be received
by Executive, naming Executive as beneficiary and issued by
a bank approved by Executive (it being understood and agreed
that a letter of credit issued by the bank which is then the
principal current lender to the Company shall be deemed
acceptable for purposes hereof) on terms and conditions
which are approved by Executive in Executive's sole
discretion, or secured by such other collateral which is not
subject to the claims of the creditors of the Company as
Executive shall approve in Executive's sole discretion, the
value of which shall be 100 % of the aggregate payments to
be received by Executive or (ii) contemporaneously with such
termination, pay the Executive a lump sum amount equal to
the present value (using a discount rate of 3%) of the
amount referred to in 5.d.v(i) above. In the event the
payment obligations herewith shall be secured by collateral
other than a bank letter of credit, and in the event the
fair market value of such collateral shall fall below the
then remaining
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balance of the amounts payable to Executive, then, within
five (5) business days after written notice thereof, the
Company shall deliver to Executive such additional or
substituted collateral which, in the aggregate with any
collateral to be continually held by Executive, has a value
which shall be not less than 100% of the remaining payments
to be made to Executive. In the event there shall be any
default in payment of any installment of the Additional
Termination Payments which is not cured within five (5)
business days after written notice thereof, or in the event
additional or substituted collateral shall not be timely
delivered to Executive as provided for above, then the
remaining unpaid balance thereof shall be immediately due
and payable without further notice and, among other things,
Executive shall have the unrestricted right to proceed
against the letter of credit or other collateral, as the
case may be.
In addition to the foregoing, the Company shall also
be obligated to pay to the Executive the Standard Termination
Payments as and when they shall become due. Furthermore, the
Company shall continue to provide the Executive and the spouse
and dependents of the Executive, at the expense of the
Company, with the medical insurance then provided to Executive
and his spouse and dependents including, without limitation,
the Company's Execucare Program or any addition thereto or
substitution therefore, for a period of five (5) years
following the termination of the employment of the Executive,
which medical insurance coverage shall be included as part of
any required COBRA Coverage; provided, however, that the
Company provided medical coverage and the COBRA Coverage
20
shall terminate with respect to the Executive, the spouse
and/or dependents of the Executive as of the date that any
such individual becomes eligible to receive coverage and
benefits as a full time employee under any plans, programs
and/or arrangements of a subsequent employer of Executive.
Availability for coverage as a spouse, principal or director
of a company shall not be treated as eligibility for
coverage. The rights and benefits of the Executive with
respect to the shares of restricted stock and options
referred to in Section 3.c. above shall be determined in
accordance with the provisions of this Agreement and the
plans and grant agreements governing such shares and
options; provided, however, that in the event there shall be
a conflict between the terms of this Agreement and the terms
of any such plan or grant agreement, then the provisions of
this Agreement shall govern and control. Except as otherwise
specified in this Agreement, neither the Executive nor the
Company shall have any further rights or obligations under
this Agreement. Except as is provided for in Section 0.x.xx.
below, the payments and benefits provided pursuant to this
Section 5.d.v. are intended as liquidated damages for a
termination of the Executive's employment by the Company
other than for Cause or Disability or for the actions of the
Company leading to a termination of the Executive's
employment by the Executive for Good Reason and shall be the
sole and exclusive remedy therefore. Executive shall have no
obligation whatsoever to mitigate any damages, costs or
expenses suffered or incurred by the Company with respect to
any payments made pursuant to this Section 5.d..v., and no
such payment shall be subject to any cancellation,
21
reduction, offset, rebate or repayment as a result of any
subsequent employment or other business activity by the
Executive including, without limitation, self employment,
except such deductions at the source as from time to time may
be required to be made pursuant to any law, rule regulation
or order.
vi. Anything in this Agreement to the contrary
notwithstanding, if, during the Employment Term and, in
connection with, upon or after the occurrence of a Change in
Control, the Executive's employment is terminated by the
Company or the Executive for any or no reason other than by
the Company for Cause, death or Disability, the Company shall
pay to the Executive, by wire transfer of immediately
available funds within ten (10) days after the Termination
Date, an amount equal to the sum of (x) three times the
Executive's Base Salary in effect on the Date of Termination
and (y) three times the Bonus which is included in the
determination of the Additional Termination Payments hereunder
(the "Change of Control Payment"). In addition to the
foregoing, the Company shall also be obligated to pay to the
Executive the Standard Termination Payments as and when they
shall become due
Anything in this Section 0.x.xx. to the contrary
notwithstanding, subsequent to the consummation of the Change
of Control transaction and, within seven (7) days after
Executive's termination of employment with the Company, the
Company shall have the right to elect to pay to the Executive
(and to the Executive's surviving spouse in the event of
Executive's death or, if no spouse shall then be surviving, to
Executive's estate) the amount of the Change of
22
Control Payment in thirty-six (36) equal or substantially
equal consecutive monthly installments, commencing on the
first day of the month immediately succeeding the
Termination Date and on the first day of each month
thereafter, without interest, provided that the Company has
first provided to Executive, and maintains in full force and
effect during the entire thirty-six (36) month period
referred to above, at the Company's expense, a bank letter
of credit (with Executive as beneficiary) or other
collateral security for such payment which is not subject to
the claims of the Company's creditors and which is in an
amount that is equal (in the case of the bank letter of
credit) to the unpaid balance of the Change of Control
Payment or (in the case of collateral other than the bank
letter of credit) which is equal to 100% in value of the
unpaid balance of the Change of Control Payment. The
election provided for above shall be effective only if
Executive receives written notice thereof within the
aforesaid seven (7) day period. Executive, in his sole
discretion which may be withheld for any reason deemed
appropriate by Executive, must approve the financial
institution issuing any such letter of credit (it being
understood and agreed that a letter of credit issued by the
bank which is then the principal current lender to the
Company shall be deemed acceptable for purposes hereof) and
the terms thereof, as well as the form of other security or
the terms of any pledge relating thereto. In the event the
payment obligations hereunder shall be secured by collateral
other than a bank letter of credit, and in the event the
fair market value of such collateral shall fall below the
then remaining balance of the amounts payable to Executive,
then,
23
within five (5) business days after written notice thereof,
the Company shall deliver to Executive such additional or
substituted collateral which, in the aggregate with any
collateral to be continually held by Executive, has a value
which shall be not less than 100% of the remaining payments to
be made to Executive. In the event there shall be any default
in payment of any installment of the Change of Control Payment
which is not cured within five (5) business days after written
notice thereof, or in the event additional or substituted
collateral shall not be timely delivered to Executive as
provided for above, then the remaining unpaid balance thereof
shall be immediately due and payable without further notice
and, among other things, Executive shall have the unrestricted
right to proceed against the letter of credit or other
collateral, as the case may be. The installment payment of the
Change of Control Payment shall not in any manner cause a
delay or postponement of the due date for the Gross-Up Payment
referred to in Section 6 below, which shall be due and payable
within ten (10) days after Executive's employment shall
terminate.
The Company shall continue to provide the Executive and the spouse and
dependents of the Executive, at the expense of the Company, with the medical
insurance then provided to Executive and his spouse and dependents including,
without limitation, the Company's Execucare Program or any addition thereto or
substitution therefore, for a period of five (5) years following the termination
of the employment of the Executive, which medical insurance coverage shall be
included as part of any required COBRA Coverage; provided, however, that the
Company provided medical coverage and the
24
COBRA Coverage shall terminate with respect to the Executive, the
spouse and/or dependents of the Executive as of the date that any such
individual becomes eligible to receive coverage and benefits as a full time
employee under any plans, programs and/or arrangements of a subsequent employer
of Executive. Availability for coverage as a spouse, principal or director of a
company shall not be treated as eligibility for coverage. Subject to the
provisions of this Agreement, which shall control in the event of any
conflicting provisions, the rights and benefits of the Executive under the
benefit plans and programs of the Company shall be determined in accordance with
the provisions of such plans and programs; provided, however, that, in the event
the Company shall timely elect to pay the Change of Control Payment over a
period of thirty-six (36) months, as provided for above (or any other term of
extended payment agreed upon by Executive and the Company), then the Company
shall continue to provide Executive with the benefits to which he was entitled
immediately prior to his termination of employment until the Change of Control
Payment is paid to Executive in full. The rights and benefits of the Executive
with respect to the shares of restricted stock and options referred to in
Section 3.c. above shall be determined in accordance with the provision of this
Agreement and the plans and grant agreements governing such shares and options;
provided, however, that in the event there shall be a conflict between the terms
of this Agreement and the terms of any such plan or grant agreement, then the
provisions of this Agreement shall govern and control. Except as otherwise
specified in this Agreement, neither the Executive nor the Company shall have
any further rights or obligations under this Agreement. The payments and
benefits provided pursuant to this Section 0.x.xx. are
25
intended as liquidated damages for a termination of the Executive's
employment by the Company other than for Cause or Disability or for the actions
of the Company leading to a termination of the Executive's employment by the
Executive for Good Reason, in each case in connection with, on or after the
occurrence of a Change in Control, and shall be the sole and exclusive remedy
therefor. Executive shall have no obligation whatsoever to mitigate any damages,
costs or expenses suffered or incurred by the Company with respect to any
payments made pursuant to this Section 0.x.xx., and no such payment shall be
subject to any cancellation, reduction, offset, rebate or repayment as a result
of any subsequent employment or other business activity by the Executive
including, without limitation, self employment, except such deductions at the
source as from time to time may be required to be made pursuant to any law, rule
regulation or order.
e. No Waiver. The failure to set forth any fact or
circumstance in a Notice of Termination for Cause or a Notice of
Termination for Good Reason shall not constitute a waiver of the right
to assert, and shall not preclude the party giving notice from
asserting, such fact or circumstance in an attempt to enforce any right
under or provision of this Agreement.
f. Date of Termination. The "Date of Termination" means the
date of the Executive's death, the Disability Effective Date, the date
on which the termination of the Executive's employment by the Company
for Cause or without Cause or by the Executive for Good Reason is
effective, or the date on which the Executive gives the Company notice
of a termination of employment without Good Reason, as the case may be.
26
6. Tax Indemnification. If the compensation, benefits, payment
accelerations, share option acceleration, appreciation rights or loan
forgiveness received by Executive from Donnkenny or the Company hereunder, or
otherwise, (the "Payments") will be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code and any successor provision, or any comparable
provision of state or local tax law (collectively, "Section 4999"), or any
interest, penalty or addition to tax will be incurred by Executive with respect
to such excise tax (such excise tax, together with any such interest, penalty or
addition to tax being referred to herein as the "Excise Tax"), then Executive
shall receive an additional cash payment (a "Gross-Up Payment") in an amount
such that after the payment by Executive of all taxes, interest, penalties, and
additions to tax imposed with respect to the Gross-Up Payment (including,
without limitation, any income tax, employment tax payable by Executive 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 such Payments. In
calculating the Gross-Up Payment, Executive will be deemed to pay Federal income
taxes at the highest marginal rate of Federal income taxation as of the year in
which the Gross-Up Payment is to be made and state and local taxes at the
highest marginal rate of taxation in the state or locality of the Gross-Up
Payment recipient's state of residence as of the date the tax obligation is
incurred, net of the maximum reduction in Federal income taxes which could be
obtained from deducting the state and local taxes if paid in the year in which
the tax obligation is incurred.
7. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any plan,,
program, policy or practice provided by the Company or any of its affiliated
companies for which the Executive may qualify, nor shall anything in this
Agreement limit or otherwise affect such rights as the Executive may have under
any
27
contract or agreement with the Company or any of its affiliated companies.
Vested benefits and other amounts that the Executive is otherwise entitled to
receive under the Restricted Stock Plan, the Stock Option Plan, or any other
plan, policy, practice or program of, or any contract of agreement (including
this Agreement) with, the Company or any of its affiliated companies on or after
the Date of Termination shall be payable in accordance with the terms of each
such plan, policy, practice, program, contract or agreement, as the case may be.
8. Inventions. Any and all inventions, innovations or improvements
("inventions") made, developed or created by the Executive (whether at the
request or suggestion of the Company (which, as used in this Section 8, shall be
deemed to include the Company and each of its subsidiaries) or otherwise,
whether alone or in conjunction with others, and whether during regular hours of
work or otherwise) during the period of his employment with the Company which
may be directly or indirectly useful in, or relate to, the business of the
Company and shall be the Company's exclusive property as against the Executive,
and the Executive shall promptly deliver to an appropriate representative of the
Company . The Executive shall, at the request of the Company and without any
payment therefore, execute any documents necessary or advisable in the opinion
of the Company's counsel to direct issuance of patents or copyrights to the
Company with respect to such inventions as are to be the Company's exclusive
property as against the Executive or to vest in the Company title to such
inventions as against the Executive. The expense of securing any such patent or
copyright shall be borne by the Company.
9. Confidential Information. The Executive shall hold in strict
confidence all secret or confidential information, knowledge or data relating to
the Company or any of its affiliated companies and their respective businesses
that the Executive obtains during the Executive's
28
employment by the Company or any of its affiliated companies; provided,
however, that Executive's obligations under this Section 9 with respect to any
specific Confidential Information shall cease when that specific Confidential
Information becomes public knowledge (other than as a result of the Executive's
violation of this Section 9) ("Confidential Information") or when it is
disclosed by any person, firm, corporation or business entity which is not bound
by the terms of a confidentiality agreement with the Company which contains
substantially identical provisions as the terms hereof. Except as is otherwise
provided for herein, the Executive shall not communicate, divulge or disseminate
Confidential Information at any time during or after the Executive's employment
with the Company, except with the prior written consent of the Company or as
otherwise required by law or regulation or by legal process. If the Executive is
requested pursuant to, or required by, applicable law or regulation or by legal
process to disclose any Confidential Information, the Executive shall provide
the Company, as promptly as the circumstances reasonably permit, with notice of
such request or requirement and, unless a protective order or other appropriate
relief is previously obtained, the Confidential Information, subject to such
request, may be disclosed pursuant to and in accordance with the terms of such
request or requirement, provided that the Executive, at the Company's expense,
shall use his best efforts to limit any such disclosure to the precise terms of
such request or requirement.
10. Non-Competition. The Executive acknowledges that the services to be
rendered by him to the Company (which, as used in this Section 10 shall be
deemed to include the Company and each of its subsidiaries) are of a special and
unique character. In consideration of his employment hereunder, the Executive
agrees, for the benefit of the Company, that he will not, during the term of
this Agreement and (except in a case where the Executive's employment is
terminated (x) by the
29
Company other than for Cause, (y) by the Executive for Good Reason, or
(z) by the Executive or the Company for any or no reason following the
occurrence of a Change in Control) thereafter until the expiration of a period
of twelve (12) months commencing on the date of termination of his employment
with the Company (a) engage, directly or indirectly, whether as principal,
agent, distributor, representative, consultant, employee, partner, stockholder,
limited partner or other investor (other than an investment of not more than (i)
five percent (5%) of the stock or equity of any corporation the capital stock of
which is publicly traded or (ii) five percent (5%) of the ownership interest of
any limited partnership or other entity) or otherwise, within the United States
of America, in any apparel business which is competitive with the business now,
or at any time during the term of this Agreement, conducted by the Company, (b)
solicit or entice to endeavor to solicit or entice away from the Company or hire
any person who was or is an officer, employee or sales representative of the
Company within the ninety (90) day period immediately preceding Executive's
termination of employment, either for his own account or for any individual,
firm or corporation, whether or not such person would commit any breach of his
contract of employment by reason of leaving the service of the Company, and the
Executive agrees not to employ, directly or indirectly, any person who was an
officer, employee or sales representative of the Company or who by reason of
such position at any time is or may be likely to be in possession of any
confidential information or trade secrets relating to the businesses or products
of the Company, or (c) solicit or entice or endeavor to solicit or entice away
from the Company any customer or prospective customer of the Company, either for
his own account or for any individual, firm or corporation with respect to the
business of the Company. In addition, the Executive shall not, at any time
during the term of this Agreement or at any time thereafter, engage in the
business which uses as its name, in whole or in part, Donnkenny, Xxxxx
30
Classics or any other trade name or trademark or corporate name used by
Donnkenny, the Company or any of their subsidiaries during the Employment Term.
11. Indemnification.
a The Company and Donnkenny shall indemnify the Executive to
the fullest extent permitted by Delaware law in effect as of the date
hereof against all costs, expenses, liabilities and losses (including,
without limitation, attorneys' fees, judgments, fines, penalties, ERISA
excise taxes, penalties and amounts paid in settlement) reasonably
incurred by the Executive in connection with a Proceeding. For the
purposes of this Section 11a, "Proceeding" shall mean any action, suit
or proceeding, whether civil, criminal, administrative or
investigative, in which the Executive is made, or is threatened to be
made, a party to, or a witness in, such action, suit or proceeding by
reason of the fact that he is or was an officer, director or employee
of the Company or Donnkenny, or is or was serving as an officer,
director, member, employee, trustee or agent of any other entity at the
request of the Company or Donnkenny, whether or not the basis of such
Proceeding arises out of or in connection with the Executive's alleged
action or omission in an official capacity.
b The Company and Donnkenny shall advance to the Executive all
reasonable costs and expenses incurred by him in connection with a
Proceeding within 20 days after receipt by the Company or Donnkenny, as
the case may be, of a written request for such advance. Such request
shall include an itemized list of the costs and expenses and an
undertaking by the Executive to repay the amount of such advance if it
shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses. Upon a request under
subsection (b), the Executive shall be deemed to have met the standard
of
31
conduct required for such indemnification unless the contrary shall
be established by a court of competent jurisdiction.
c The Executive shall not be entitled to indemnification under
this Section 11 unless he meets the standard of conduct specified in
the Delaware General Corporation Law. Any indemnification under
subsection a. (unless ordered by a court) shall be made by the Company
or Donnkenny only as authorized in the specific case upon a
determination that indemnification of the Executive is proper in the
circumstances because he has met the applicable standard of conduct set
forth in the Delaware Corporation Law. Such determination shall be made
(1) by the Board or the Board of Directors of Donnkenny, as the case
may be, by a majority vote of a quorum consisting of directors who were
not parties to such Proceeding, or (2) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (3)
by the stockholders.
d Neither the Company nor Donnkenny shall settle any
Proceeding or claim in any manner which would impose on the Executive
any penalty or limitation without his prior written consent. Neither
the Company nor Donnkenny nor the Executive will unreasonably withhold
its or his consent to any proposed settlement.
e The indemnification in this Section 11 shall inure to the
benefit of the Executive's heirs, executors and administrators.
f The Company and Donnkenny agree to use their respective best
efforts to obtain, continue and maintain an adequate directors and
officers' liability insurance policy and shall cause such policy to
cover the Executive to the extent the Company or Donnkenny
32
provides such coverage for its other executive officers. Upon request
by Executive, the Company and Donnkenny shall furnish Executive with
written evidence that such coverage is in full force and effect.
g Donnkenny and the Company agree to indemnify and hold
Executive harmless from all losses, costs, fees and expenses
including, without limitation, reasonable legal fees and litigation
expenses, which Executive shall suffer, sustain or incur as a result
of, in connection with or arising from any breach of this Agreement by
Donnkenny or the Company.
12. Attorneys' Fees. The Company agrees to pay, as incurred,
all legal fees and expenses incurred by the Company and the Executive in
connection with the preparation of this Agreement. The Company further agrees
to pay, if and only if the Executive prevails in any contest, to the fullest
extent permitted by law, all legal fees and expenses that the Executive may
reasonably incur as a result of any contest by Donnkenny, the Company, the
Executive or others of the validity or enforceability of or liability under, or
otherwise involving, any provision of this Agreement, together with interest on
any delayed payment at the applicable federal rate provided for in Section
7872(f)(2)(A) of the Code.
13. Successors; Beneficiaries.
h This Agreement is personal to the Executive and, without the
prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
33
i This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
j The Company or Donnkenny, as the case may be, shall require
any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company or Donnkenny expressly to assume and agree
to perform this Agreement in the same manner and to the same extent
that Donnkenny or the Company would have been required to perform it if
no such succession had taken place; provided, however, that no such
assignment or transfer shall have the effect of releasing or relieving
Donnkenny or the Company of any liability or obligation to the
Executive hereunder or in any other agreement, plan or document
contemplated herein. As used in this Agreement, "Company" shall mean
both the Company as defined above and any such successor that assumes
and agrees to perform this Agreement, by operation of law or otherwise
and "Donnkenny" shall mean both Donnkenny as defined above and any such
successor that assumes and agrees to perform this Agreement by
operation of law or otherwise.
k The Executive shall be entitled, to the extent permitted
under any applicable law, to select and change the beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder
following the Executive's death by giving the Company written notice
thereof. In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the
Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.
34
14. Notices. All notices and other communications under this
Agreement shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, or overnight mail service addressed as follows:
If to the Executive:
Xx. Xxxxxx X. Xxxx
c/o Donnkenny Apparel, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
With a copy to:
Xxxxx Xxxxxxx
Suite 1800
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
If to Donnkenny or the Company:
Donnkenny Apparel, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
or to such other address as either party furnishes to the other in writing in
accordance with this Section 14. Notices and communications shall be effective
when actually received by the addressee.
15. Modification or Waiver. No amendment, modification, waiver,
termination or cancellation of this Agreement shall be binding or effective for
any purpose unless it is made in a writing signed by the party against whom
enforcement of such amendment, modification, waiver, termination or cancellation
is sought. No course of dealing between or among the parties to this Agreement
shall be deemed to affect or to modify, amend or discharge any provision or term
of this Agreement. No delay on the part of Donnkenny, the Company or the
Executive in the exercise of
35
any of their respective rights or remedies shall operate as a waiver thereof,
and no single or partial exercise by Donnkenny, the Company or the Executive of
any such right or remedy shall preclude other or further exercises thereof. A
waiver of a right or remedy on any one occasion shall not be construed as a bar
to or waiver of any such right or remedy on any other occasion.
16. Governing Law; Jurisdiction. This Agreement and all rights,
remedies and obligations hereunder, including, but not limited to, matters of
construction, validity and performance shall be governed by the laws of the
State of New York without regard to its conflict of laws principles or rules.
17. Severability. Whenever possible each provision and term of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision or term of this Agreement shall be
held to be prohibited by or invalid under such applicable law, then such
provision or term shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating or affecting in any manner whatsoever the
remainder of such provisions or term or the remaining provisions or terms of
this Agreement.
18. Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same Agreement.
19. Headings. The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
hereof and shall not affect the construction or interpretation of this
Agreement.
36
20. Entire Agreement. This Agreement (together with all documents
and instruments referred to herein) constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and
oral, among the parties with respect to the subject matter hereof.
21. Arbitration. If any controversy or dispute shall arise between the
parties hereto in connection with, arising from, or in respect to this
Agreement, any provision hereof, or any provision of any instrument, document,
agreement or other writing delivered pursuant hereto, or with respect to the
validity of this Agreement or any such document, agreement or other writing, and
if such controversy or dispute shall not be resolved within thirty (30) days
after the same shall arise, then such dispute or controversy shall be submitted
for arbitration to the New York, New York office of the American Arbitration
Association in accordance with its commercial arbitration rules then in effect.
Any such dispute or controversy shall be determined by one (1) arbitrator. Such
arbitrator may award any relief which such arbitrator shall deem proper in the
circumstances, without regard to the relief which would otherwise be available
to either party hereto in a court of law or equity, including, without
limitation, an award of money damages (including interest on unpaid amounts,
calculated from the due date of any such amount, at a rate per annum determined
by said arbitrator), specific performance and injunctive relief. The award and
findings of such arbitrator shall be conclusive and binding upon the parties
thereto, and judgment upon such award may be entered in any court of competent
jurisdiction. Any party against whom an arbitrator's award shall be issued shall
not, in any manner, oppose or defend against any suit to confirm such award, or
any enforcement proceedings brought against such party, whether within or
outside of the United States of America, with respect to any judgment entered
upon the award, and such party hereby consents to the entry of
37
a judgment against such party, in the full amount thereof, or other relief
granted therein, in any jurisdiction in which such enforcement is sought.
22. Survival. The respective obligations of Donnkenny and the Company
and the Executive under Sections 5 (with respect to amounts owing as a result of
any termination), 6, 7 (with respect to amounts owing), 8, 9, 10, 11, 12, 13, 21
or this Section 22 shall survive any termination of Executive's employment;
provided, however, that the Executive's obligations under Section 11
(Non-Competition) shall terminate and shall not survive in the event (i) the
Executive's employment is terminated by the Company other than for Cause or by
the Executive for Good Reason, or (ii) the Executive's employment is terminated
for any or no reason following a Change in Control.
23. Conflicting Terms. In the event any of the terms of this
Agreement shall conflict with any of the terms of any benefit plan of the
Company or Donnkenny in which Executive is a participant, then the terms
of this Agreement shall govern and control.
38
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
DONNKENNY, INC., a Delaware
corporation
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
-------------------------------------
Title: President and COO
-------------------------------------
DONNKENNY APPAREL, INC., a
Delaware corporation
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
-------------------------------------
Title: President and COO
-------------------------------------
EXECUTIVE
/s/ Xxxxxx X. Xxxx
------------------------------------------------
XXXXXX X. XXXX
39
