AGREEMENT
AGREEMENT dated October 17, 2003 between SWANK, INC., a Delaware
corporation with an address at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Corporation"), and XXXXXX X. XXXXXXX, an individual whose principal residence
address is 00 Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee has been a valuable senior executive employee of
the Corporation for a number of years; and
WHEREAS, the Corporation and the Employee desire to set forth in
writing certain agreements between them in the event of the termination of the
employment of the Employee by the Corporation under certain circumstances.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Corporation and the Employee
hereby agree as follows:
1. Employee at Will.
The Corporation and the Employee hereby acknowledge and agree that the
Employee is an employee at will, and that the Corporation may terminate the
employment of the Employee at any time for any reason or for no reason
whatsoever.
2. Severance Payments Upon Termination other than for Cause.
(a) In the event that the Corporation shall terminate the employment of
the Employee for any reason other than (i) for Cause (as such term is defined
below), (ii) the Disability (as such term is defined below) of the Employee, or
(iii) upon the death of the Employee (a "Termination Event"), the Corporation
will continue to pay to the Employee his base salary at the per annum rate in
effect on the Termination Date (as such term is defined below), for the period
commencing on the Termination Date and ending on the day immediately preceding
the first yearly anniversary of the Termination Date (the "Severance Period"),
less, in each case the Required Deductions and any applicable New Employment
Compensation (as such terms are defined below) (the "Severance Payments"). In no
event, however, will the Employee be entitled to receive any rights, amounts, or
benefits under this Agreement unless he executes and delivers to the Corporation
a release and covenant not to xxx prepared by, and acceptable to, the
Corporation or if the Employee is in violation of any of the terms and
provisions of this Agreement. The Severance Payments will be payable by check
(or, if requested by the Employee, by direct deposit into the Employee's account
in substantially the same manner as presently deposited and subject to no
material additional conditions to the Corporation than presently exist) and in
substantially equal installments in accordance with the Corporation's regular
pay intervals for its executive officers, or in such other manner as shall be
mutually agreeable to the Corporation and the Employee.
(b) The Corporation will withhold, and the payments otherwise payable
to the Employee hereunder shall be reduced by, all applicable federal, state and
local taxes, FICA, unemployment compensation taxes and other taxes, assessments
and withholdings required by applicable law to be withheld (the "Required
Deductions").
(c) Upon a Termination Event, if the Employee shall elect to continue
to receive group medical insurance for him and/or his family pursuant to the
federal "COBRA" law, presently 29 U.S.C. sec. 1161 et. seq., the Corporation
will reimburse the Employee or, at the Corporation's option, the Corporation
will pay directly all premium costs associated therewith for the Severance
Period, to the extent such premium costs exceed the premium costs the Employee
would have had to pay had he been employed during such period for coverage for
him and his family under the Corporation's group medical insurance in effect on
the Termination Date. In addition, upon a Termination Event, the Employee will
be fully vested under the Corporation's executive life insurance program as the
same may be in effect from time to time; provided, that nothing herein shall
require the Corporation to continue such program in effect or shall prohibit or
restrict the Corporation from amending, modifying or supplementing such program
at any time and from time to time.
(d) The Employee will not be required to mitigate the amount of any
Severance Payments to which he might be entitled hereunder during the first
three months after a Termination Event (the "Initial Three-Month Period").
However, the Employee will be required to mitigate all other amounts payable to
the Employee under this Agreement as follows: if after a Termination Event the
Employee shall secure employment (as an employee, consultant, independent
contractor, or otherwise) of any kind and receive compensation of any kind in
respect thereof (the "New Employment Compensation"), any amounts which the
Employee might be entitled to receive under this Agreement after the Initial
Three-Month Period will be reduced by the amount of the New Employment
Compensation. The Employee shall, within five (5) business days, notify the
Corporation in writing of (i) the existence of any such employment, (ii) the
identity of the employer, and (iii) the amounts he may receive, with such
substantiation as the Corporation shall from time to time reasonably request.
(e) The term "Cause" shall mean (i) a willful refusal or willful
failure by the Employee to perform any duties consistent with the position of
Chief Financial Officer of the Corporation assigned to the Employee which is not
cured within 14 days after notice of such breach shall have been given to the
Employee by the Corporation (or within 30 days after such notice if such breach
shall not be curable within 14 days after such notice and the Employee shall, at
all times, diligently pursue the cure of such breach within such 30-day period),
(ii) the commission by the Employee of an act involving moral turpitude,
dishonesty, theft, misappropriation of assets, or unethical business conduct, in
each case which materially impairs or xxxxx the reputation, or is otherwise to
the material detriment, of the Corporation, or any of its subsidiaries or
affiliated corporations, or which could reasonably be expected to do so, (iii)
the possession or use of illegal drugs or prohibited substances, (iv) excessive
drinking which impairs the Employee's ability to perform his duties and
responsibilities hereunder, or (v) the conviction of the Employee of, or the
pleading of nolo contendere by the
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Employee to, any felony, or a misdemeanor involving any of the acts referred to
in clause (a)(ii) above.
(f) The term "Disability" shall mean the failure of the Employee,
because of physical or mental illness or incapacity, to be able to substantially
perform the duties and services required of him pursuant to his employment by
the Corporation for a period of 120 consecutive days or for a period of 270 days
in any 365-day period.
(g) The term "Termination Date" shall mean the last day the
Employee is employed by the Corporation.
4. Certain Covenants of the Employee.
(a) The Employee acknowledges that by his employment he has been and
will continue to be in a confidential relationship with the Corporation and will
have access to confidential information and trade secrets of the Corporation,
its subsidiaries and affiliated corporations (collectively, the "Confidential
Information"). Confidential Information includes, but is not limited to,
customer and client lists, financial information, price lists, marketing and
sales strategies and procedures, computer programs, databases and software,
supplier, vendor and service information, personnel information, operating
procedures and techniques, business plans and systems, and all other records,
files, and information in respect of the Corporation. During the term of his
employment by the Corporation and thereafter, the Employee shall maintain the
strictest confidentiality of all Confidential Information and shall not use or
permit the use of, or disclose, discuss, communicate or transmit or permit the
disclosure, discussion, communication or transmission of, any Confidential
Information. This paragraph shall not apply to (i) information that, by means
other than the Employee's direct or indirect disclosure, becomes generally known
to the public, or (ii) information the disclosure of which is compelled by law
(including judicial or administrative proceedings and legal process). In that
connection, in the event that the Employee is requested or required (by oral
question, interrogatories, requests for information or documents, subpoenas,
civil investigative demand or other legal process) to disclose any Confidential
Information, the Employee agrees to provide the Corporation with prompt written
notice of such request or requirement so that the Corporation may seek an
appropriate protective order or relief therefrom or may waive the requirements
or this paragraph 4(a). If, failing the entry of a protective order or the
receipt of a waiver hereunder, the Employee is compelled to disclose
Confidential Information under pain of liability for contempt or other censure
or penalty, the Employee may disclose such Confidential Information to the
extent so required.
(b) In the event of a breach or threatened breach by the Employee of
any of the provisions of paragraph 4(a), the Corporation shall be entitled to an
injunction to be issued by any court or tribunal of competent jurisdiction to
restrain the Employee from committing or continuing any such violation. In any
proceeding for an injunction, the Employee agrees that his ability to answer in
damages shall not be a bar or be interposed as a defense to the granting of a
temporary or permanent injunction against him. The Employee acknowledges that
the Corporation will not have an adequate remedy at law in the event of any
breach by him as aforesaid and that the Corporation may suffer irreparable
damage and injury in the
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event of such a breach by him. Nothing contained herein shall be construed as
prohibiting the Corporation from pursuing any other remedy or remedies available
to the Corporation in respect of such breach or threatened breach.
5. Representations.
(a) The Employee represents and warrants that he has full authority and
legal capacity to execute and deliver this Agreement and perform his duties and
obligations hereunder, that he has duly executed this Agreement, and that he is
not under any contractual, legal or other restraint or prohibition that would
restrict, prohibit or prevent the Employee from performing this Agreement and
his duties and obligations hereunder.
(b) The Employee acknowledges that he is free to seek advice from
independent counsel with respect to this Agreement. The Employee has obtained
such advice and is not relying on any representation or advice from the
Corporation or any of its officers, directors, attorneys, or other
representatives regarding this Agreement, its contents or effect.
(c) The Corporation represents and warrants that it has full corporate
power and authority to execute and deliver this Agreement and perform its duties
and obligations hereunder, that it has duly executed this Agreement, and that it
is not under any contractual, legal or other restraint or prohibition that would
restrict, prohibit or prevent Employer from performing this Agreement and his
duties and obligations hereunder.
6. Assignability.
This Agreement may not be assigned by the Employee and all of its terms
and conditions shall be binding upon and inure to the benefit of the Employee
and his heirs, executors, administrators, legal representatives and assigns.
This Agreement may be assigned, in whole or in part, by the Corporation and
shall be binding upon and inure to the benefit of the Corporation, its
successors and assigns. Successors of the Corporation shall include, without
limitation, any corporation or other entity acquiring directly or indirectly all
or a substantial part of the assets of the Corporation whether by merger,
consolidation, purchase, lease or otherwise, and such successor shall thereafter
be deemed the "Corporation" for purposes hereof.
7. Notices.
Except as otherwise expressly provided, any notice, request, demand or
other communication permitted or required to be given under this Agreement shall
be in writing, shall be sent by one of the following means to the Employee at
his address set forth on the first page of this Agreement and to the Corporation
at its address set forth on the first page of this Agreement, Attention:
President, (or to such other address as shall be designated hereunder by notice
to the other parties and persons receiving copies, effective upon actual
receipt) and shall be deemed conclusively to have been given: (a) on the first
business day following the day timely deposited for overnight delivery with
Federal Express (or other
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equivalent national overnight courier service) or United States Express Mail,
with the cost of delivery prepaid or for the account of the sender; (b) on the
fifth business day following the day duly sent by certified or registered United
States mail, postage prepaid and return receipt requested; or (c) when otherwise
actually received by the addressee on a business day (or on the next business
day if received after the close of normal business hours or on any non-business
day). A copy of each notice, request, demand or other communication given to the
Corporation by the Employee shall be given to Xxxxxxx X. Xxxxxxxx, Esq., Jenkens
& Xxxxxxxxx Xxxxxx Xxxxxx, LLP, The Chrysler Building, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
8. No Waiver by Action, Cumulative Rights, Etc.
Any waiver or consent from either party respecting any term or
provision of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given and shall not be deemed, regardless of
frequency given, to be a further or continuing waiver or consent. The failure or
delay of either party at any time or times to require performance of, or to
exercise any of its powers, rights or remedies with respect to, any term or
provision of this Agreement in no manner shall affect that party's right at a
later time to enforce any such term or provision.
9. Interpretation, Headings.
The parties acknowledge and agree that the terms and provisions of this
Agreement have been negotiated, shall be construed fairly as to all parties
hereto, and shall not be construed in favor of or against any party. The section
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
10. Severability.
The invalidity or unenforceability of any provision of this Agreement
shall not affect, impair or invalidate any other provision of this Agreement.
11. Counterparts; Facsimile Signatures; New York Governing Law;
Amendments, Entire Agreement.
This Agreement may be executed in two counterpart copies, each of which
may be executed by one of the parties hereto, but both of which, when taken
together, shall constitute a single agreement binding upon the parties hereto.
Any signature delivered by a party by facsimile transmission shall be deemed to
be an original signature hereto. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
without regard to principles of conflicts of laws (other than Section 5-1401 of
the New York General Obligations Law). Each and every modification and amendment
of this Agreement shall be in writing and signed by the parties hereto, and any
waiver of, or consent to any departure from, any term or provision of this
Agreement shall be in writing and signed by the party granting the waiver or
consent. This Agreement contains
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the entire agreement of the parties and supersedes all prior representations,
agreements and understandings, oral or otherwise, between the parties with
respect to the matters contained herein.
IN WITNESS WHEREOF, the Corporation and the Employee have signed this
Agreement on the date set forth on the first page of this Agreement.
SWANK, INC.
By: /s/ Xxxx Xxxxx
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Print Name: Xxxx Xxxxx
Print Title: President
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
