Exhibit 10.3(a)
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December 17, 1996
Xx. X.X. Xxxxxx
Chief Executive Officer
Ithaca Industries, Inc.
Xxxxxxx 000 Xxxx
Xxxxxxxxxx, XX 00000
Dear Xx. Xxxxxx:
The purpose of this letter is to set forth the terms of this
engagement between Xxxxxxx & Marsal, Inc. ("A&M") and Ithaca Industries, Inc.
("Ithaca") and to describe the scope of the management services to be performed
and the basis of compensation for those services.
1. DESCRIPTION OF SERVICES
The anticipated scope of A&M's services are as follows:
(a) Xxxxx Xxxxxxx will serve as Acting Chief Operating Officer
of the Company, reporting to the Chief Executive Officer of the Company.
(b) Other members of A&M will provide consulting services on
an as-needed basis, as requested by Ithaca.
2. COMPENSATION
(a) XXXXX XXXXXXX. A&M will receive a monthly fee of $35,000
for the services provided by Xxxxx Xxxxxxx. This fee could be adjusted downward
upon the mutual agreement of Xxxxx Xxxxxxx and Ithaca if Xxxxx Xxxxxxx devotes
less than 90 percent of his time to the management of the Company.
(b) OTHER MEMBERS OF A&M. To the extent other members of A&M
provide consulting services, A&M will receive fees based on the following hourly
rates:
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December 17, 1996
Founding Managing Director $500
Managing Director $400
Director $250
Associate $200
In addition, A&M will be reimbursed for its reasonable out-of-pocket expenses.
All fees and expenses will be billed on a monthly basis.
A $50,000 retainer is required at the outset of the engagement. This
retainer will be returned or credited against the final xxxx.
In addition, A&M will be entitled to following incentive
compensation:
CASH BONUS PLAN
Incentive Compensation will begin to be earned upon
achievement of 85% of the Revised Plan EBITDA at 85% of the
Annual Amount and will be increased pro-rata as actual
performance meets or exceeds the Revised Business Plan target.
Annual Amounts: FY 1997 - $273
(at 100% of FY 1998 - Based on 65% of Xxxxx
Revised Plan Xxxxxxx monthly fees earned.
EBITDA)
STOCK OPTION GRANT
Amount: Options for 1% of reorganized Ithaca.
Timing of Grant: Upon approval of Long-Term Employee
Incentive Plan by the Post-Reorganization.
Vesting: Immediately upon grant.
Pricing: Strike price based upon the fair market
value of the New Ithaca Common Stock as
determined by the Board of directors of
Reorganized Ithaca or by an independent third
party as designated by such Board.
3. TERM
This agreement will commence as of the date hereof and will continue
for a period of one year, unless terminated earlier by Ithaca. Ithaca may
terminate this agreement without cause by giving 30 days' written notice to A&M.
4. INDEMNIFICATION
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December 17, 1996
The attached indemnification agreement is incorporated herein by
reference and shall be executed upon the acceptance of this letter agreement.
Very truly yours,
Xxxxxxx & Marsal, Inc.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Accepted and Agreed
Ithaca Industries, Inc.
By: /s/ X.X. Xxxxxx
---------------------------
X.X. Xxxxxx
Exhibit 10.3(b)
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INDEMNIFICATION AGREEMENT
This indemnity is made part of an agreement, dated December 17, 1996
(which together with any renewals, modifications or extensions thereof, is
herein referred to as the "Agreement"), between and among Xxxxxxx & Marsal, Inc.
("A&M") and Ithaca Industries, Inc. (the "Company") for services to be rendered
to the Company by A&M.
A. The Company agrees to indemnify and hold harmless A&M against any
and all losses, claims, damages, liabilities and expenses, including the
reasonable costs for counsel or others in investigating, preparing or defending
any action or claim, whether or not in connection with litigation in which A&M
is a party, caused by, relating to, based upon or arising out of (directly or
indirectly) A&M's acceptance of or the performance or non-performance of its
obligations under the Agreement; provided, however, such indemnity shall not
apply to any such loss, claim, damage, liability or expense to the extent it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) to have resulted from the gross negligence or willful misconduct
of A&M. The Company also agrees that A&M shall not have any liability (whether
direct or indirect, in contract or tort or otherwise) to the Company for or in
connection with the engagement of A&M, except for any such liability for losses,
claims, damages, liabilities or expenses that are found in a final judgment by a
court of competent jurisdiction (not subject to further appeal) to have resulted
primarily and directly from A&M's gross negligence or willful misconduct. A&M
will not settle, compromise or consent to the entry of any judgment in any
proceeding or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder without the prior written consent of the
Company.
B. These indemnification provisions shall be in addition to any
liability which the Company may otherwise have to A&M or the persons identified
in the following sentence. These indemnification provisions shall extend to A&M,
its directors, officers, employees, agents and affiliates; all references to A&M
in these indemnification provisions shall be understood to include any and all
of the foregoing persons and entities.
C. If any action, proceeding or investigation is commenced to which
A&M proposes to demand indemnification hereunder, it will notify the Company
with reasonable promptness; provided, however, that any failure by A&M to notify
the Company will not relieve the Company from its obligations hereunder, except
to the extent that such failure shall have actually prejudiced the defense of
such action. The Company shall promptly pay expenses reasonably incurred by A&M
in defending or settling (in accordance with paragraph A above) any action,
proceeding or investigation in which A&M is a party or is threatened to be made
a party by reason of its relationship with the Company hereunder, in advance of
the final
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disposition of such action, proceeding, or investigation upon submission of
invoices therefor. A&M hereby undertakes, and the Company hereby accepts its
undertaking, to repay any and all such amounts so advanced if it shall
ultimately be determined that A&M is not entitled to be indemnified therefor.
The Company may, in lieu of advancing the expenses of separate counsel for A&M,
provide A&M with legal representation by the same counsel who represents the
Company, provided such counsel is reasonably satisfactory to A&M, at no cost to
A&M; provided, however, that if such counsel or counsel to A&M shall determine
that due to the existence of actual or potential conflicts of interest between
A&M and the Company such counsel is unable to represent both A&M and the
Company, then A&M shall be entitled to use a separate counsel of its own choice,
and the Company shall promptly advance its reasonable expenses of such separate
counsel upon submission of invoices therefor. Nothing herein shall prevent A&M
from using separate counsel of its own choice at its own expense.
D. In order to provide for just and equitable contribution if a
claim for indemnification pursuant to these indemnification provisions is made
but it is found in a final judgment by a court of competent jurisdiction (not
subject to further appeal) that such indemnification may not be enforced in such
case, even though the express provisions hereof provide for indemnification,
then the Company, on the one hand, and A&M, on the other hand, shall contribute
to the losses, claims, damages, liabilities and expenses so that A&M is
responsible in the aggregate for a percentage of losses, claims, damages,
liabilities and expenses equal to the relative fault of the Company, on the one
hand, and A&M, on the other hand, in connection with the statements, acts or
omissions which result in such losses, claims, damages, liabilities and costs;
and further provided that in no event will A&M's aggregate contribution for all
losses, claims, damages, liabilities and expenses with respect to which
contribution is available hereunder exceed the amount of fees actually received
by A&M pursuant to the Agreement. No person found liable for a fraudulent
misrepresentation shall be entitled to contribution hereunder from any person
who is not also found liable for such fraudulent misrepresentation.
E. Neither termination of the Agreement nor completion of the
engagement of A&M shall affect these indemnification provisions, which shall
hereafter remain operative and in full force and effect. These indemnification
provisions shall apply to the engagement of A&M pursuant to the Agreement and to
any other engagement which A&M may perform for the Company.
F. The rights provided herein shall not be deemed exclusive of any
other rights to which A&M may be entitled under the certificate of incorporation
or
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bylaws of the Company, any other agreements, any vote of stockholders or
disinterested directors of the Company, any applicable law or otherwise.
Dated: Xxxxxxx & Marsal, Inc.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Dated: Ithaca Industries, Inc.
By: /s/ X.X. Xxxxxx
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X.X. Xxxxxx
