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EXHIBIT 10.23
EMPLOYMENT AGREEMENT
This Agreement (this "Agreement"), dated as of January 1, 2001 is made
by and between Marisa Xxxxxxxxx, Incorporated, a Delaware corporation (the
"Corporation") and G. Xxxxxxx Xxxx (the "Executive").
RECITALS
1. The Corporation desires to continue the services of the Executive as
Executive Vice President of Marisa Xxxxxxxxx Apparel, Inc., a Delaware
corporation and a wholly owned subsidiary of the Corporation ("Subsidiary") and
to enter into an agreement embodying the terms of those continued relationships.
2. The Executive is willing to serve as President of the Subsidiary and
is willing to accept continued employment by the Subsidiary on the terms set
forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and other good and valuable consideration, the Corporation and
the Executive hereby agree as follows.
1. Definitions.
1.1. "Affiliate" means any person or entity controlling, controlled by
or under common control with the Corporation.
1.2. "Board" means the Board of Directors of the Corporation.
1.3. "Cause" means (a) the Executive is convicted of a felony, or (b)
the Executive, in carrying out Executive's duties and responsibilities under
this Agreement, is guilty of gross neglect or gross misconduct resulting, in
either case, in material economic harm to the Corporation and/or the Subsidiary.
1.4. "Commencement Date" has the meaning assigned to it in Section 3.
1.5. "Date of Termination" means (a) in the case of a termination for
which a Notice of Termination is required, the date of actual receipt of such
Notice of Termination or, if later, the date specified therein, as the case may
be, and (b) in all other cases, the actual date on which the Executive's
employment terminates during the Term of Employment.
1.6. "Disability" means the Executive's inability to render, for a
period of six consecutive months, services hereunder by reason of permanent
disability, as determined by the written medical opinion of an independent
medical physician mutually acceptable to the Executive and the Corporation. If
the Executive and the Corporation cannot agree as to such
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an independent medical physician each shall appoint one medical physician and
those two physicians shall appoint a third physician who shall make such
determination.
1.7. "Good Reason" means and shall be deemed to exist if, without the
prior express written consent of the Executive, (a) the Executive is assigned
any duties or responsibilities inconsistent in any material respect with the
scope of the duties or responsibilities associated with the Executive's titles
or positions, as set forth and described in Section 4 of this Agreement; (b) the
Executive suffers a reduction in the duties, responsibilities or effective
authority associated with Executive's titles and positions as set forth and
described in Section 4 of this Agreement; (c) the Executive is not appointed to,
or is removed from, the offices or positions provided for in Section 4 of this
Agreement, other than under circumstances involving Cause; (d) the Corporation
fails to substantially perform any material term or provision of this Agreement;
(e) the Executive's compensation (including base compensation and/or method of
calculation of bonus) provided for hereunder is decreased; (f) the Executive's
office location is changed to a location other than Newark, Delaware; (g) the
Corporation fails to obtain the full assumption of this Agreement by a successor
entity in accordance with Section 11.2 of this Agreement; (h) the Corporation
continually fails to reimburse the Executive for business expenses in accordance
with Section 5.3 of this Agreement; (i) the Corporation purports to terminate
the Executive's employment for Cause and such purported termination of
employment is not effected in accordance with the requirements of this
Agreement; (j) the Executive shall not be nominated or elected, or shall be
removed, as a director of the Board of Directors of each of the Corporation and
the Subsidiary; (k) the Board or the shareholders of the Corporation or the
Subsidiary, either or both, as may be required to authorize the same, shall
approve (i) any liquidation of the Corporation, or the sale of substantially all
of the assets of the Corporation taken as a whole, or (ii) any merger,
consolidation and/or other business combination involving the Corporation or any
combination of any such transactions (a "Transaction"), other than a Transaction
(A) involving only the Corporation and the Subsidiary, or (B) immediately after
which the shareholders of the Corporation who were shareholders immediately
prior to the transaction continue to own beneficially, directly or indirectly,
in substantially similar proportions to those in effect immediately prior to
such transaction more than 50% of the then outstanding voting securities of the
Corporation and the Subsidiary; (l) any Person or group (as such term is defined
in Rule 13d-5 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of related Persons which is not an Affiliate of the Corporation or the
Subsidiary as of the Commencement Date shall beneficially own, directly or
indirectly, more than 50% of the then outstanding voting stock of the
Corporation or the Subsidiary. For purposes of this Agreement, "Person(s)" means
any individual, entity, or other person, as defined in Section 3(a)(9) of the
Exchange Act, and as used in Sections 13(d) and 14(d) thereof; or (n) the
Corporation shall engage in any Business Combination with an Interested Person,
each as defined in Article Fifth of the Corporation's Restated Certificate of
Incorporation.
1.8. "Retirement" means the termination of the Executive's employment
with the Corporation for any reason at any time after (a) the Executive attains
age 65 or (b) the Executive meets the requirements for early or regular
retirement under the Corporation's retirement policy, assuming for this purpose
that the Executive was a participant in such plan.
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1.9. "Term of Employment" has the meaning assigned to it in Section 3.
2. Employment. Subject to the terms and provisions set forth in this
Agreement, the Corporation hereby agrees to cause the Executive to be a director
of the Subsidiary during the Term of Employment and also agrees to cause the
Subsidiary at all times during the Term of Employment to employ the Executive as
President of the Subsidiary, and the Executive hereby accepts such employment.
3. Effective Date and Term of Employment. (a) The term of employment
under this Agreement shall commence as of January 1, 2001, (the "Commencement
Date") and shall, unless extended as hereinafter provided, terminate on December
31, 2003 (the "Term of Employment").
(b) On the initial termination date of the Term of Employment, and each
succeeding anniversary, the Term of Employment shall automatically be extended
for an additional one year period unless, not later than six months prior to any
such anniversary, either party to this Agreement shall have given written notice
to the other that the Term of Employment shall not be extended or further
extended beyond its then already automatically extended term, if any.
4. Positions, Responsibilities and Duties.
4.1. Positions. During the Term of Employment, the Executive shall be
employed as, and the Corporation shall at all times cause the Executive to be,
the President of the Subsidiary. In addition to such positions, the Corporation
shall use its best efforts to ensure that the Executive is elected by the
shareholders of the Corporation to serve as a director of the Corporation during
the Term of Employment. In such position, the Executive shall have the duties,
responsibilities and authority normally associated with the office and position
of director and President of a corporation, but in no event shall the
Executive's duties, responsibilities and/or effective authority with respect to
the Corporation and/or the Subsidiary be less than the duties, responsibilities
and effective authority the Executive possessed immediately prior to the date of
this Agreement.
4.2. Duties. During the Term of Employment, the Executive shall devote
all or substantially all of Executive's business time and effort to perform the
duties associated with Executive's offices and positions as set forth in Section
4.1 and shall use Executive's best efforts to perform faithfully and efficiently
the duties and responsibilities contemplated by this Agreement; provided,
however, that the Executive shall not be limited from serving as a director of
other companies and shall not be required to perform any duties and
responsibilities which would be likely to result in a non-compliance with or
violation or breach of any applicable law or regulation.
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5. Compensation and Other Benefits.
5.1. Base Salary. During the Term of Employment, the Executive shall
receive a base salary ("Base Salary"), payable in equal monthly installments, of
Three Hundred Thousand ($300,000) Dollars per annum. After the initial
termination date of the Term of Employment, such Base Salary shall be reviewed
annually for increase (but not decrease) beginning January 1, 2002 in the sole
discretion of the Compensation Committee of the Board.
5.2. Bonuses. During the Term of Employment, the Executive shall be
eligible to participate, as determined by the Compensation Committee of the
Board, in all incentive compensation plans and programs maintained by the
Corporation and/or the Subsidiary for the benefit of senior executives,
including without limitation bonus and stock option or other stock-based
compensation plans. By each April 30 next following a year that included a
portion of the Term of Employment, the Compensation Committee will, in its
discretion, consider paying bonuses to Executive based on the Executive's
performance during that year and the Subsidiaries' results and financial
performance during that year and such other considerations as they consider
relevant. Such bonuses, if awarded, will be paid by such April 30. However,
Executive acknowledges that such bonuses are discretionary, and have not been
promised.
5.3. Expense Reimbursement. During the Term of Employment, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in performing Executive's duties and
responsibilities hereunder in accordance with the policies and procedures of the
Corporation as in effect and actually applied immediately prior to the
Commencement Date, including without limitation an automobile allowance and/or
reimbursement, which will cover, among other things, expenses for automobile
garage parking, automobile insurance and other automobile expenses, or, if more
favorable to the Executive, as in effect at any time thereafter with respect to
the Executive or other executives of the Corporation or the Subsidiary.
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5.4. Vacation and Fringe Benefits.
(a) The Corporation shall maintain disability insurance for the benefit
of the Executive, and shall maintain such insurance so long as the Executive
remains a senior executive officer of the Corporation, provided that (i) the
aggregate amount of such insurance coverage shall be reduced if and to the
extent necessary to reduce the aggregate annual premium payable by the
Corporation to $10,000. The Corporation may, at its election and for its
benefit, insure the Executive against death and/or disability and the Executive
agrees to cooperate with the Corporation in obtaining such policies and in
maintaining the same in full force and effect throughout the Term of Employment.
(b) During the Term of Employment, the Executive shall also be entitled
to such paid vacation, fringe benefits and perquisites as provided to the
Executive by the Corporation and/or the Subsidiary immediately prior to the
Commencement Date or, if more favorable to the Executive, as provided by the
Corporation or the Subsidiary at any time thereafter.
5.5. Office and Support Staff. Unless the Executive otherwise agrees in
writing, during the Term of Employment the Executive shall be entitled to
executive secretarial and other administrative assistance of a type and extent,
and to an office or offices (with furnishings and other appointments) of a type
and size, at least equal to that provided to the Executive immediately prior to
the date of this Agreement.
6. Termination.
6.1. Termination Due to Death or Disability. The Corporation may
terminate the Executive's employment hereunder due to Disability. In the event
of the Executive's death or a termination of the Executive's employment by the
Corporation due to Disability, the Executive, Executive's estate or Executive's
legal representative, as the case may be, shall be entitled to receive:
(a) Base Salary continuation at the rate in effect (as
provided for by Section 5.1 of this Agreement) on the Date of Termination
through the later to occur of (i) the first anniversary of such termination, or
(ii) the end of the Term of Employment;
(b) the product of any annual bonus paid or payable (and
annualized for any fiscal year consisting of less than 12 months) to Executive
for the most recently completed fiscal year during the Term of Employment and a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365.
(c) any deferred compensation not yet paid to the Executive
(including, without limitation, interest or other credits on such deferred
amounts) and any accrued vacation pay; and
(d) reimbursement for expenses incurred but not yet paid prior
to such death or Disability; and
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(e) any other compensation or benefits which may be owed or
provided to the Executive in accordance with the terms and provisions of any
applicable agreements, plans and programs of or made by the Corporation and/or
the Subsidiary.
Anything in this Agreement to the contrary notwithstanding, the
Executive's family shall be entitled to receive benefits at least equal to the
most favorable benefits provided by the Corporation to surviving families of
employees of the Corporation under such plans, programs, practices and policies
relating to family death benefits, if any, in accordance with the most favorable
plans, programs, practices and policies of the Corporation in effect on the date
of the Executive's death with respect to other key employees of the Corporation
and their families. Anything in this Agreement to the contrary notwithstanding,
the Executive shall be entitled after the Disability Date of Termination to
receive disability and other benefits at least equal to the most favorable of
those provided by the Corporation to disabled employees and/or their families in
accordance with such plans, programs, practices and policies relating to
disability, if any, in effect at any time during the 90-day period immediately
preceding the Disability Date of Termination with respect to other key employees
of the Corporation and their families.
6.2. Termination by the Corporation for Cause. The Corporation may
terminate the Executive's employment hereunder for Cause as provided in this
Section 6.2. If the Corporation terminates the Executive's employment hereunder
for Cause, the Executive shall be entitled to receive:
(a) Base Salary at the rate in effect (as provided for by
Section 5.1 of this Agreement) at the time of such termination through the Date
of Termination;
(b) any deferred compensation (including, without limitation,
interest or other credits on such deferred amounts) and any accrued vacation
pay; and
(c) reimbursement for expenses incurred, but not yet paid
prior to such termination of employment; and
(d) any other compensation or benefits which may be owed or
provided to the Executive in accordance with the terms and provisions of any
applicable agreements, plans and programs of or made by the Corporation and/or
the Subsidiary.
In any case described in this Section 6.2, the Executive shall be given
written notice authorized by a vote of at least a majority of the members of the
Board that the Corporation intends to terminate the Executive's employment for
Cause. Such written notice, given in accordance with Section 6.7 of this
Agreement, shall specify the particular act or acts, or failure to act, which is
or are the basis for the decision to so terminate the Executive's employment for
Cause. The Executive shall be given the opportunity within 30 calendar days of
the receipt of such notice to meet with the Board to defend such act or acts, or
failure to act, and, if such act or failure to act is correctable, the Executive
shall be given 30 business days after such meeting to correct such act or
failure to act. If such act or failure to act is not
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correctable or upon failure of the Executive, within such latter 30 day period,
to correct such act or failure to act, the Executive's employment by the
Corporation shall automatically be terminated under this Section 6.2 for Cause
as of the date determined in Section 1.5 of this Agreement. Anything herein to
the contrary notwithstanding, if, following a termination of the Executive's
employment by the Corporation for Cause based upon the conviction of the
Executive for a felony involving actual dishonesty as against the Corporation or
the Subsidiary, such conviction is overturned on appeal, the Executive shall be
entitled to the payments and benefits that the Executive would have received as
a result of a termination of the Executive's employment by the Corporation
without Cause.
6.3. Termination Without Cause or Termination For Good Reason. The
Corporation shall be permitted to terminate the Executive's employment hereunder
without Cause and the Executive shall be permitted to terminate Executive's
employment hereunder for Good Reason. For purposes of this Agreement, such a
termination of employment by the Executive shall constitute a "Termination for
Good Reason" only if effected in accordance with the notice provisions of
Section 6.7(b). If the Corporation terminates the Executive's employment
hereunder without Cause, other than due to death or Disability, or if the
Executive effects a Termination for Good Reason, the Executive shall be entitled
to receive:
(a) the product of any annual bonus paid or payable (and
annualized for any fiscal year consisting of less than 12 months) to Executive
for the most recently completed fiscal year during the Term of Employment
(unless in the case of termination by the Corporation without Cause, in which
case, such product will be determined by reference to the highest annual bonus
paid or payable under this Agreement during the Term of Employment)and a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365.
(b) a lump sum payment in an amount equal to the present value
of Base Salary owed through the later to occur of (i) the second anniversary of
such termination, or (ii) the end of the Term of Employment;
(c) any deferred compensation (including, without limitation,
interest or other credits on the deferred amounts) and any accrued vacation pay;
(d) reimbursement for expenses incurred, but not paid prior to
such termination of employment; and
(e) any other compensation or benefits which may be owed or
provided to the Executive in accordance with the terms and provisions of any
applicable agreements, plans and programs of or made by the Corporation and/or
the Subsidiary.
6.4. Voluntary Termination. The Executive may effect a Voluntary
Termination of Executive's employment hereunder. A "Voluntary Termination" shall
mean a termination of employment upon one hundred eighty (180) days prior
written notice to the Corporation by the Executive on Executive's own initiative
other than (a) a termination due to death or Disability, (b) a Termination for
Good Reason, or (c) a termination due to Retirement. A
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Voluntary Termination shall not be, nor shall it be deemed to be, a breach of
this Agreement and shall entitle the Executive to all of the rights and benefits
which the Executive would be entitled in the event of a termination of
Executive's employment by the Corporation for Cause.
6.5. Termination Due to Retirement. The Executive may terminate
Executive's employment hereunder as a result of Retirement. If the Executive
employment hereunder is terminated due to Retirement, the Executive shall be
entitled to receive:
(a) Base Salary at the rate in effect (as provided for by
Section 5.1 of this Agreement) at the time of such termination through the date
of Retirement;
(b) any deferred compensation not yet paid to the Executive
(including, without limitation, any interest on credits on such deferred
amounts) and any accrued vacation pay;
(c) reimbursement for expenses incurred but not yet paid prior
to the date of Retirement; and
(d) any other compensation or benefits which may be owed or
provided to the Executive in accordance with the terms and provisions of any
applicable agreements, plans and programs of or made by the Corporation and/or
the Subsidiary.
6.6. No Mitigation; No Offset. In the event of any termination of
employment under this Section 6, the Executive shall be under no obligation to
seek other employment and there shall be no offset against any amounts due the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that the Executive may obtain. Any amounts due under
this Section 6 are in the nature of severance payments, or liquidated damages,
or both, and are not in the nature of a penalty.
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6.7. Notice of Termination. Any termination of the Executive's
employment by the Corporation for Cause, any Termination for Good Reason, and
any termination of employment by the Executive in connection with a Voluntary
Termination shall be communicated by a notice of termination to the other party
hereto given in accordance with Section 13.3 of this Agreement (the "Notice of
Termination"). The Notice of Termination shall be given (a) in the case of a
termination for Cause, within ninety (90) business days after a director of the
Corporation (excluding the Executive) has actual knowledge of the events giving
rise to such purported termination, (b) in the case of a Termination for Good
Reason, within 180 days of the Executive's having actual knowledge of the event
or events constituting Good Reason; and (c) in the case of Voluntary
Termination, not later than 150 days prior to the date of termination specified
in such notice. Such notice shall (x) indicate the specific termination
provision in this Agreement relied upon, (y) 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, as applicable, and (z)
if the termination date is other than the date of receipt of such notice,
specify the date on which the Executive's employment is to be terminated (which
date shall not be earlier than the date on which such notice is actually given).
6.8. Certain Further Payments by the Corporation.
6.8.1. Tax Reimbursement Payment. Anything in this Agreement to the
contrary notwithstanding, in the event that any amount or benefit paid, payable,
or to be paid, or distributed, distributable, or to be distributed to or with
respect to the Executive by the Corporation, the Subsidiary or any other
Affiliate (collectively, the "Covered Payments"), is or becomes, at any time, as
a result of (a) any Internal Revenue Service claims or assertions, or (b)
Section 6.8.2 below or otherwise, subject to the excise tax imposed by or under
Section 4999 of the Code (or any similar tax that may hereafter be imposed),
and/or any interest or penalties with respect to such excise tax (such excise
tax, together with such interest and penalties, are hereinafter collectively,
referred to as the "Excise Tax"), the Corporation shall pay to the Executive at
the time specified in Section 6.9 below an additional amount (the "Tax
Reimbursement Payment") such that after payment by the Executive of all taxes
(including, without limitation, any interest or penalties imposed with respect
to such taxes), including, without limitation, any Excise Tax, imposed on or
attributable to the Tax Reimbursement Payment provided by this Agreement, the
Executive retains an amount of the Tax Reimbursement Payment equal to the sum of
(a) the amount of the Excise Tax imposed upon the Covered Payments, and (b) an
amount equal to the product of (i) any deductions disallowed for federal, state
or local income tax purposes because of the inclusion of the Tax Reimbursement
Payment in the Executive's adjusted gross income, and (ii) the highest
applicable marginal rate of federal, state or local income taxation,
respectively, for the calendar year in which the Tax Reimbursement Payment is
made or is to be made.
6.8.2. Determining Excise Tax. Except as otherwise provided in Section
6.8.1(a), for purposes of determining whether any of the Covered Payments will
be subject to the Excise Tax and the amount of such Excise Tax,
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(a) such Covered Payments will be treated as "parachute
payments" (within the meaning of Section 280G(b)(2) of the Code) and such
payments in excess of the Code Section 280G(b)(3) "base amount" shall be treated
as subject to the Excise Tax, unless, and except to the extent that, the
Corporation's independent certified public accountants (the "Accountants") or
legal counsel reasonably acceptable to the Executive, deliver timely, upon the
Executive's request, a written opinion, reasonably satisfactory to the
Executive's legal counsel, to the Executive that the Executive has a reasonable
basis to claim that the Covered Payments (in whole or in part) (i) do not
constitute "parachute payments", (ii) represent reasonable compensation for
services actually rendered (within the meaning of Section 280G(b)(4) of the
Code) in excess of the "base amount" allocable to such reasonable compensation,
or (iii) such "parachute payments" are otherwise not subject to such Excise Tax
(with appropriate legal authority, detailed analysis and explanation provided
therein by the Accountants); and
(b) the value of any Covered Payments which are non-cash
benefits or deferred payments or benefits shall be determined by the Accountants
in accordance with the principles of Section 280G of the Code.
6.8.3. Applicable Tax Rates and Deductions. For purposes of determining
the amount of the Tax Reimbursement Payment, the Executive shall be deemed:
(a) to pay federal, state and/or local income taxes at the
highest applicable marginal rate of income taxation for the calendar year in
which the Tax Reimbursement Payment is made or is to be made, and
(b) to have otherwise allowable deductions for federal, state
and local income tax purposes at least equal to those disallowed due to the
inclusion of the Tax Reimbursement Payment in the Executive's adjusted gross
income.
6.8.4. Subsequent Events. If, pursuant to a written opinion, reasonably
satisfactory to the Executive, of the Accountants (or legal counsel reasonably
acceptable to the Executive) delivered to the Executive, the Excise Tax is
subsequently determined on a reasonable basis and in good faith (other than as a
result of a tax contest) to be less than the amount taken into account hereunder
in calculating any Tax Reimbursement Payment made, the Executive shall repay to
the Corporation the portion of any prior Tax Reimbursement Payment that would
not have been paid if such redetermined Excise Tax had been applied in
calculating such Tax Reimbursement Payment, plus interest on the amount of such
repayment at the mid-term discount rate provided in Section 1274(b)(2)(B) of the
Code. Notwithstanding the immediately foregoing sentence, if any portion of the
Tax Reimbursement Payment to be refunded to the Corporation has been paid to any
federal, state or local tax authority, repayment thereof shall not be required
until an actual refund or credit of such portion has been made to or obtained by
the Executive from such tax authority, and any interest payable to the
Corporation shall not exceed the interest received or credited to the Executive
by any such tax authority. The Executive shall be fully indemnified by the
Corporation for any out-of-pocket costs, expenses or fees attributable to the
filing of any refund or other claim. The Executive and the Corporation shall
mutually agree upon the course of action to be pursued
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(and the method of allocating the expenses thereof) if any good faith claim for
refund or credit from such tax authority made by the Executive is denied.
Notwithstanding the immediately preceding paragraph, if, in the written
opinion of the Executive's tax advisors delivered to the Accountants and the
Corporation, the Excise Tax is later determined to exceed the amount taken into
account by the Accountants or legal counsel, as the case may be, hereunder at
the time any Tax Reimbursement Payment is made by reason of (i) manifest error,
(ii) any payment the existence or amount of which could not be or was not
determined or known about at the time of any Tax Reimbursement Payment, or (iii)
any determination, claim or assertion made by any tax authority that the Excise
Tax is or should be greater than the amount of such Excise Tax taken into
account previously by the Accountants or legal counsel, as the case may be, or
as otherwise previously determined, the Corporation shall make an additional Tax
Reimbursement Payment in respect of such excess Excise Tax (which Tax
Reimbursement Payment shall include, without limitation, any interest or
penalties payable with respect to such excess Excise Tax) at the time specified
in Section 6.9 below. With respect to this Section 6.8.4, if any such tax
authority makes such a determination, the Executive shall notify the Corporation
of such occurrence. If the Corporation obtains (at the Corporation's sole
expense) an opinion of legal counsel reasonably satisfactory to the Executive
that it is more likely than not that the Executive would succeed in disputing
such claim, assertion or determination of such tax authority, the Executive
shall, at the sole expense of the Corporation, make a good faith effort to
contest such claim, assertion or determination of such tax authority in all
relevant administrative proceedings with such tax authority and in any related
judicial proceeding (excluding any appeals thereof); provided, however, that if
the Executive determines in good faith that the continued contest of any such
claim, assertion or determination with such tax authority would have an adverse
impact on Executive's overall tax position (which good faith determination shall
take into account the magnitude of the amounts involved), then, upon receipt of
notice by the Corporation from the Executive to that effect, the Executive
shall, without foregoing any right to receive any Tax Reimbursement Payment
described in this Section 6.8, have no further obligation to pursue any such
contest with any such tax authority. The Executive may, as a condition to
pursuing or commencing any contest described in this Section 6.8.4 in any
judicial proceedings (which proceedings shall be in a forum chosen at the sole
discretion of the Executive), require the Corporation to advance any amount of
tax required to be paid in order to pursue such contest. In conducting any
contest described in this Section 6.8.4, the Executive shall use Executive's
best efforts to keep the Corporation advised and will permit the Corporation to
prepare and suggest appropriate responses and actions that may be reasonably
made or taken by the Executive. Notwithstanding the above, the decisions as to
such response or actions shall be solely that of the Executive and the Executive
shall have the sole right to control the proceeding. The Corporation shall bear
all expenses of any proceeding relating to any contest described in this Section
6.8.4, whether incurred by the Corporation or the Executive, including, without
limitation, all fees and disbursements of attorneys, accountants and expert
witnesses and any additional interest or penalties applicable. Nothing contained
in this Agreement shall under any circumstances give the Corporation any right
to examine the tax returns or any other records of the Executive.
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6.9. Payment. Except as otherwise provided in this Agreement, and
except with respect to continued payment of Base Salary in accordance with any
provisions of this Agreement, any payments to which the Executive shall be
entitled under this Section 6 shall be made as promptly as possible following
(a) the Date of Termination, (b) the payment of any Covered Payments, or (c) the
delivery of the opinion of the Executive's tax advisors, in accordance with
Section 6.8.4. If the amount of any payment due to the Executive cannot be
finally determined with 90 days after the Date of Termination, such amount shall
be estimated on a good faith basis by the Corporation and the estimated amount
shall be paid no later than ninety (90) days after such Date of Termination. As
soon as practicable thereafter, the final determination of the amount due shall
be made and any adjustment requiring a payment to or from the Executive shall be
made as promptly as practicable.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any bonus or
incentive plan or program provided or maintained by the Corporation, the
Subsidiary or any other Affiliate and for which the Executive may qualify or be
selected, nor shall anything herein limit or otherwise prejudice such rights as
the Executive may have under any other existing or future agreements with the
Corporation, the Subsidiary or any Affiliate, including, without limitation, any
change of control agreements or any stock option or restricted stock agreements.
Except as otherwise expressly provided for in this Agreement, amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plans or programs of the Corporation, the Subsidiary or any other Affiliate
at or subsequent to the Date of Termination shall be payable in accordance with
such plans or programs.
8. Full Settlement. The Corporation's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Corporation may have against the Executive or others.
9. Legal Fees and Expenses. In the event that a claim for payment or
benefits under this Agreement is disputed, each of the parties hereto shall pay
its own attorney fees and expenses incurred in connection with such dispute. In
addition, each party shall pay its own legal fees and expenses incurred in
connection with the preparation and negotiation of this Agreement.
10. Confidential Information and Noncompetition.
10.1. Confidential Information. The Executive shall not, during the
Term of Employment and thereafter, without the prior express written consent of
the Corporation or the Subsidiary, disclose any confidential information,
knowledge or data relating to the Corporation, the Subsidiary or any other
Affiliate and their respective businesses, which (a) was obtained by the
Executive in the course of the Executive's employment with the Corporation, and
(b) which is not information, knowledge or data otherwise in the public domain
(other than by reason of a breach of this provision by the Executive), unless
required to do so by a court of law or equity or by any governmental agency or
other authority. In no event shall an asserted violation of this Section 10.1
constitute a basis for delaying or
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withholding the payment of any amounts otherwise payable to the Executive under
this Agreement.
10.2. Noncompetition. If the Executive terminates Executive's
employment hereunder pursuant to Section 6.4 of this Agreement, or if the
Corporation terminates Executive's employment hereunder pursuant to Section 6.1
or 6.2, then the Corporation, by written notice given to the Executive within
thirty (30) days after the Executive delivers a Notice of Termination in
connection with a Voluntary Termination, may require that this Section 10.2
apply, subject to the Corporation complying with its obligations under this
Agreement.. If the Corporation gives notice to the Executive as provided in the
preceding sentence, then the Executive, without the express written consent of
the Corporation, shall not, for the twelve month period following the Date of
Termination, engage in any business, whether as an employee, consultant,
partner, principal, agent, representative or stockholder (other than as a
stockholder of less than a five (5%) equity interest) or in any other corporate
or representative capacity, if it involves engaging in, or rendering services or
advice pertaining to, any lines of business the Corporation or the Subsidiary
was actively conducting on the Date of Termination. If the Corporation shall
institute any action or proceeding to enforce the provisions of this Section
10.2, or shall file any claim in any proceeding to enforce such provisions, the
Executive hereby waives the claim or defense that the Corporation has an
adequate remedy at law and waives the requirement that the Corporation post a
bond in securing equitable relief, and the Executive shall not contend in any
such action or proceeding the claim or defense that an adequate remedy at law
exists.
11. Successors.
11.1. The Executive. This Agreement is personal to the Executive and,
without the prior express written consent of the Corporation, shall not be
assignable by the Executive, except that the Executive's rights to receive any
compensation or benefits under this Agreement may be transferred or disposed of
pursuant to testamentary disposition; intestate succession or pursuant to a
domestic relations order of a court of competent jurisdiction. This Agreement
shall inure to the benefit of and be enforceable by the Executive's heirs,
beneficiaries and/or legal representatives.
11.2. The Corporation. This Agreement shall inure to the benefit of and
be binding upon the Corporation and its successors and assigns. The Corporation
shall require any successor to all or substantially all of the business and/or
assets of the Corporation or the Subsidiary, whether direct or indirect, by
purchase, merger, consolidation, acquisition of stock, or otherwise, by an
agreement in form and substance satisfactory to the Executive, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent as the Corporation would be required to perform if no such succession had
taken place.
12. Miscellaneous.
12.1. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, applied without reference
to principles of conflict of laws.
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12.2. Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
12.3. Notices. All notices and other communications hereunder 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,
addressed as follows:
If to the Executive:
G. Xxxxxxx Xxxx
Marisa Xxxxxxxxx, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Corporation:
Marisa Xxxxxxxxx, Incorporated
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
12.4. Withholding. The Corporation may withhold from any amounts
payable under this Agreement such federal, state or local income taxes as shall
be required to be withheld pursuant to any applicable law or regulation.
12.5. Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
12.6. Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
12.7. Beneficiaries/References. The Executive shall be entitled to
select (and change) a beneficiary or beneficiaries to receive any compensation
or benefit payable hereunder following the Executive's death, and may change
such election, in either case by giving the Corporation written notice thereof.
In the event of the Executive's death or a judicial determination of Executive's
incompetence, reference in this Agreement to the Executive shall be deemed,
where appropriate, to refer to other beneficiary(ies), estate or Executive's
legal representative(s).
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12.8. Entire Agreement. Upon the commencement of the Term of
Employment, this Agreement will contain the entire agreement between the parties
concerning the subject matter hereof and will supersede all prior agreements,
understandings, discussions, negotiations and undertakings, whether written or
oral, between the parties with respect to the subject matter hereof, including
the Old Employment Agreement, which is hereby terminated, discharged and
released, but excluding (a) the Director Indemnification Agreement dated as of
June 30, 1994, by and between the Corporation and the Executive, and (b) the
non-competition agreement, dated July 1, 1993, between Subsidiary and Executive.
12.9. Representation. The Corporation represents and warrants that it
is fully authorized and empowered to enter into this Agreement and that the
performance of its obligations under this Agreement will not violate any
agreement between the Corporation and any other person, firm or organization or
any applicable laws or regulations.
12.10. Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement or the
Executive's employment hereunder to the extent necessary to the intended
preservation of such rights and obligations.
13. Arbitration.
(a) Any controversy arising out of or relating to this Agreement shall
be settled by arbitration in New York pursuant to the rules of the American
Arbitration Association, and judgment may be entered in any Court having
jurisdiction.
(b) The parties consent to the jurisdiction of the Supreme Court of the
State of New York, and of the United States District Court for the Southern
District of New York, for all purposes in connection with arbitration, including
the entry of judgment on any award; and consent that any process, notice, motion
or other application to either of said courts, and any papers in connection with
arbitration, may be served by registered or certified mail, return receipt
requested, by personal service, or in such other manner as may be permissible
under the rules of the applicable court or arbitration tribunal, provided a
reasonable time for appearance is allowed.
(c) The arbitrators shall have no power to alter or modify any express
provision of this Agreement, or to render an award which has the effect of
altering or modifying any express provision hereof, provided, however, that any
application for reformation of this Agreement shall be made to the arbitrators
and not to any Court, and the arbitrators shall be empowered to determine
whether valid grounds for reformation exist.
(d) Any arbitration proceeding must be instituted within one year after
the claimed breach occurred, and a party's failure to institute arbitration
proceedings within such period shall constitute an absolute bar to the
institution of any proceedings by said party and a waiver of such claimed
breach. Notwithstanding any law or rule to the contrary, the determination of
whether said one-year period has expired shall be made by the Court and shall
not be within the jurisdiction of the arbitrators.
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(e) The Executive or the Corporation, as the case may be, may be
awarded all reasonable attorneys' fees and expenses incurred by the Executive or
the Corporation, as the case may be, in connection with any arbitration or court
proceeding arising out of this Agreement, in the arbitrators' discretion.
(f) In the event that any dispute arising under this Agreement shall be
submitted to arbitration pursuant to this Section 13, the Executive shall be
entitled to receive all compensation, bonuses, benefits and perquisites
contemplated by this Agreement during the pendency of any such proceedings
unless the Corporation shall place the disputed amount into an interest-bearing
escrow account with the Corporation's attorneys, the terms of which escrow shall
provide that all escrowed funds shall be immediately distributed to the party or
parties entitled thereto immediately upon a determination of the arbitrators
which is final, confirmed, and not subject to appeal.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and the Corporation has caused this Agreement to be executed in its name on its
behalf, and its corporate seal to be hereunto affixed and attested by its
Secretary, all as of the day and year first above written.
EXECUTIVE
______________________________
G. Xxxxxxx Xxxx
MARISA XXXXXXXXX, INCORPORATED
MARISA XXXXXXXXX APPAREL, INC.
By: _________________________
Its:__________________________
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