Exhibit 10.23
October 10, 2001
Mr. Xxxxxxx Xxxx
0 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Dear Xxxxxxx:
On behalf of Xxxxxx A.S.L., Ltd. (the "Company"), a Delaware corporation, I am
pleased to confirm your employment with the Company on the terms set forth in
this letter agreement. If you agree with the following terms, please sign a copy
of this letter agreement and return it to me upon our receipt of which it will
become a binding contract.
1. Duties. You (the "Executive") shall be employed as Senior Vice President,
Worldwide Manufacturing & Operations of the Company. Executive's
responsibilities will include management of the Secaucus distribution center,
all sourcing operations and manufacturing facilities worldwide, quality
compliance, as well as working closely with the MIS department on the
implementation of manufacturing systems. Executive shall perform such other
duties and services as are commensurate with Executive's position and such other
duties and services as are from time-to-time assigned to Executive by the Chief
Executive Officer of the Company or such other senior officers or executives as
the Chief Executive Officer may designate. Executive shall devote Executive's
full working time and efforts to the Company's business and to the performance
of Executive's duties under this Agreement. Executive shall be available to
travel as the needs of the business require, which travel shall be in accordance
with the Company's travel policy applicable to similarly situated employees of
the Company and its affiliates.
2. Term. The Company agrees to employ Executive and Executive agrees to serve,
on the terms and conditions of this Agreement, for a period commencing on
October 15, 2001 (the "Effective Date") and ending on the third anniversary date
of the Effective Date, unless earlier terminated pursuant to the terms hereof
(the "Initial Employment Term"). The Initial Employment Term shall be extended
for successive one year terms (each, an "Additional Employment Term") unless the
Company or the Executive gives written notice of non-extension at least 90 days
prior to the end of the Initial Employment Term or the then Additional
Employment Term, unless earlier terminated pursuant to the terms hereof. During
the term Executive is employed hereunder, the Initial Employment Term and the
Additional Employment Terms, if applicable, collectively shall be referred to as
the "Employment Term."
3. Compensation.
(a) Base Salary. For Executive's services under this Agreement, as of the
Effective Date, the Company shall pay Executive an annualized base salary of
$250,000 payable in
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accordance with the Company's customary payroll practices from time to time in
effect. Thereafter, the Company will review Executive's compensation annually
and may, in its sole discretion, increase Executive's base salary.
(b) Annual Cash Bonuses.
(i) During the Employment Term, Executive shall be entitled to a cash
bonus (the "Bonus") with a target of between 15% and 30% of Executive's
annual base salary, in accordance with the terms and provisions of the
Company's then existing executive bonus plan (the "Bonus Plan"). The Bonus
shall be determined annually at the same time bonuses are determined for
similarly situated employees of the Company, in accordance with the Bonus
Plan, and shall be payable at the same time and in the same manner as
bonuses are paid to other similarly situated employees of the Company.
(ii) During the Employment Term, the targets and performance goals,
including but not limited to the extent to which they will be based on
corporate performance, divisional performance, or other criteria consistent
with the terms and provisions of the Bonus Plan, shall be established
annually by the Company in accordance with the Bonus Plan.
(c) Equity Awards. Upon adoption by the Company of an Equity Award program,
which is expected to occur by September, 2002, and thereafter for each fiscal
year during the Employment Term hereof, Executive shall be eligible to receive
annual awards of stock options generally available to similarly situated
employees of the Company, in accordance with the Company's then current Equity
Awards program.
(d) Participation in Benefit Plans and other Benefits. Executive also shall
be entitled to (i) participate in all other Executive benefit plans generally
available to similarly situated employees of the Company, subject to Executive's
eligibility therefor, (ii) three (3) weeks of paid vacation per annum, and (iii)
travel in accordance with the Company's travel policy generally applicable to
similarly situated employees of the Company.
(e) Successor Executive Compensation Programs. The Company hereby reserves
the right from time to time to amend, alter, or rescind the Bonus Plan and
Equity Award programs and the plans referred to in Section 3(d); provided,
however, that the Company agrees that during the Employment Term Executive shall
be entitled to participate in executive compensation programs of a similar type
and at a level generally applicable to similarly situated employees of the
Company, subject to the approval of such programs and plans by the applicable
compensation committee of the Board of Directors and legal limitations.
4. Severance Payments.
(a) Severance Payments. The Company may terminate Executive's employment at
any time with or without Cause (as defined below). If during the Employment
Term, Executive's employment with the Company is terminated by the Company
without Cause (which right the
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Company shall have at any time during the Employment Term) and other than as a
result of death, notice of non-extension of Employment Term as provided in
Section 2 of this Agreement or as provided in Section 5 of this Agreement, upon
Executive's execution and effectiveness of a general release of Claims (as
hereinafter defined) which is acceptable in form and substance to the Company,
the Company shall pay to Executive an amount equal to Executive's then current
annual base salary (the "Severance Amount"). The Severance Amount shall be paid
in equal installments over a 12-month period in accordance with the Company's
customary payroll practices (but not as an employee). Executive agrees to accept
the Severance Amount, as may be reduced below, in full settlement of all Claims.
The Severance Amount payable to Executive under this Section 4(a) shall be
reduced by any compensation actually received, whether or not during the period,
by Executive as a result of Executive's employment or retention by another
employer as an employee or in a consulting capacity for services rendered during
the period. Executive shall advise the Company promptly of any such employment
and/or consulting fees received by Executive and rebate any amount due to the
Company. No Severance Amount shall be payable by reason of termination due to
the death or disability of the Executive, termination for Cause, or
non-extension of the Employment Term in accordance with Section 2 of this
Agreement. As used in this paragraph, "Claims" shall mean all claims arising,
prior to the date of the general release, against the Company and its affiliates
and their respective officers, directors, agents, executives and employees in
such capacities, other than claims for vested accrued benefits (which shall not
include any earned but unused vacation) or vested stock options under the terms
of their respective plans and claims for unreimbursed authorized business
expenses.
(b) Termination of Severance Payment. Notwithstanding Section 4(a) above,
if Executive violates the provisions of Section 6 of this Agreement after
Executive's termination of employment by the Company, Executive shall have no
further right to the payment of any Severance Amount payable thereafter under
this Agreement.
(c) "Cause". As used in this Agreement, "Cause" shall mean (i) a continuous
or substantial dereliction of duties which continues after written notice by the
Company, (ii) failure to promptly follow the written direction of the Chief
Executive Officer or such other senior officers or executives as the Chief
Executive Officer may designate, (iii) dishonesty, fraud or breach of fiduciary
duty with respect to the Company or Executive's duties, (iv) gross negligence in
the performance of Executive's duties, (v) willful misconduct with regard to the
Company, its business, assets or employees which in the good faith, sole
discretion of the Chief Executive Officer is material, (vi) conviction of, or
pleading nolo contendre to, a felony or any other crime involving fraud,
dishonesty or moral turpitude, or (vii) any other material breach of the terms
of this Agreement or the Company's policies as in effect from time to time,
which breach continues more than 30 days after written notice from the Company
to the Executive setting forth the conduct and the provisions of this Agreement
or policies alleged to have been breached. For purposes of this Section 4(c),
"Company" shall include affiliates and licensees of the Company.
(d) Salary and Accrued Benefits. If Executive's employment with the Company
is terminated for any reason, including death, the Company shall pay to
Executive (or her estate) any unpaid base salary and other accrued benefits to
which Executive is entitled on the date of termination under the terms of the
Company's compensation plans.
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5. Disability, Illness, Etc. If by reason of Executive's physical or mental
incapacity Executive is unable to perform Executive's material duties for a
period of more than 90 days, whether or not consecutive, in any 365-day period,
the compensation otherwise payable to Executive during such period shall be
discontinued for any portion of such period in excess of 90 days, and the
Company, at its option, may at any time after such 90-day period while Executive
is incapacitated terminate this Agreement upon written notice to Executive. In
the event of such termination, Executive will not be entitled to any Severance
Amount.
6. Additional Provisions.
(a) Confidential Information. All confidential information relating to the
business of Company or its affiliates or their respective officers, directors,
executives or employees, or of any customer, supplier, or licensee of the
Company or its affiliates ("Confidential Information") which Executive now or
hereafter possesses as a result of her employment by the Company or its
affiliates shall not be furnished, published, disclosed, or made accessible by
Executive to any other person, firm, or corporation either during or after the
termination of Executive's employment or used by Executive except while employed
hereunder in the regular course of business and for the benefit of the Company
and its affiliates, in each case without the prior written permission of the
Company. Executive shall return all tangible evidence of such confidential
information to the Company prior to or on the date of termination of Executive's
employment. As used in this Section 6(a), "Confidential Information" shall
exclude that information which is or comes into the public domain through no
fault of Executive or which Executive obtains after the termination of
Executive's employment by the Company from a third party who to the knowledge of
Executive has the right to disclose such information. The foregoing shall not
prohibit compliance with legal process provided that Executive gives the Company
prompt written notice thereof and cooperates with the Company in its efforts to
obtain a protective order for the Confidential Information.
(b) Non-Competition and Non-Solicitation.
(i) In view of the unique and valuable services it is expected
Executive has rendered and will continue to render to the Company and its
affiliates, the relationship Executive has and will have with the customers
of the Company and its affiliates, Executive's knowledge of the customers,
trade secrets, and other proprietary information relating to the business
of the Company and its affiliates and their customers, suppliers and
licensees and similar knowledge regarding the Company and its affiliates
which Executive has obtained and will continue to obtain, and in
consideration of the rights granted to Executive under this Agreement,
Executive agrees that Executive will not during the period Executive is
employed by the Company or any of its affiliates Participate In (as herein
defined) any other business or organization, whether or not such business
or organization now is or shall then be competing with or of a nature
similar to the business of the Company or any of its affiliates or their
licensees. Nothing herein shall prevent Executive from owning publicly
traded securities representing less than 1 % of the equity of a publicly
traded company.
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(ii) Executive further agrees that while Executive is employed by the
Company or any of its affiliates and thereafter (notwithstanding the reason
or basis for the termination of Executive's employment with the Company or
its affiliates) for a period of 24 months, Executive shall not, directly or
indirectly, hire, engage or retain, or aid or assist any other person or
entity to hire, engage, or retain (A) (x) any designers of the Company or
its affiliates, (y) any person who held the position of Director or any
equivalent or more senior position at the Company or any of its affiliates,
or (z) any licensee of Company or any person who acted as one of the
Company's or its affiliates' outside consultants, in each instance at the
time of termination of Executive's employment or within the six-month
period prior thereto, (B) any person employed by a licensee of the Company
or its affiliates who worked on the Company's brands at the time of
termination of Executive's employment or within the six-month period prior
thereto, or (C) any person or entity that supplied piece goods or designs
to, or that manufactured or sold apparel to, the Company or any of its
affiliates during the six-month period prior to such termination.
(c) "Participate In." For purposes of this Section 6, the term "Participate
In" shall mean: directly or indirectly, for Executive's own benefit or for,
with, or through any other person, firm, or corporation, own, manage, operate,
control, loan money to, or participate in the ownership, management, operation,
or control of, or be connected as a director, officer, executive, partner,
consultant, agent, independent contractor, or otherwise with, or acquiesce in
the use of Executive's name in."
(d) Non- Disparagement. During the Employment Term and thereafter, the
Executive agrees that s/he shall not disparage the Company or its affiliates or
their respective officers, directors, executives or licensees and shall not
publish or make any statement which is reasonably foreseeable to become public
with respect to the Company or its affiliates, or any of their respective
directors, officers, executives or licensees.
(e) Copyrights, Inventions, etc. Any interest in patents, patent
applications, inventions, technological innovations, copyrights, copyrightable
works, developments, discoveries, designs, concepts, ideas and processes ("Such
Inventions") which Executive now or hereafter during the period s/he is employed
by the Company or any of its affiliates under this Agreement or otherwise may
own or develop either individually or with others relating to the fields in
which any of the Company or its affiliates may then be engaged or contemplates
being engaged shall belong to the Company or any of its affiliates and forthwith
upon request of the Company, Executive shall execute all such assignments and
other documents (including applications for patents, copyrights, trademarks and
assignments thereof) and take all such other action as the Company may
reasonably request in order to assign to and vest in the Company or its
affiliates all Executive's right, title, and interest (including, but not
limited to, waivers to any moral rights) in and to Such Inventions throughout
the world, free and clear of liens, mortgages, security interests, pledges,
charges and encumbrances. Executive acknowledges that all copyrightable works
created by the Executive as an employee will be "works made for hire" on behalf
of the Company and its affiliates and that the Company and its affiliates shall
have all
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rights therein in perpetuity throughout the world. The Executive hereby appoints
any officer of the Company as the Executive's duly authorized attorney-in-fact
to execute, file, prosecute and protect Such Inventions before any government
agency, court or authority. If for any reason the Company does not own any Such
Invention, the Company and its affiliates shall have the exclusive and royalty
free right to use in their businesses, and to make products therefrom, Such
Invention as well as any improvements or know-how related thereto.
(f) Equitable Remedies; Survival. Executive acknowledges that a breach or
threatened breach of any of the provisions of this Section 6 will cause
irreparable harm and that any remedy at law may be inadequate and that
accordingly the Company, in addition to its remedies at law, shall be entitled
to an injunction or specific performance or any other mode of equitable relief
without the necessity of showing any actual damage, posting a bond or furnishing
other security. The provisions of this Section 6 shall survive the termination
of this Agreement.
7. Expenses. Executive shall be entitled to reimbursement for all reasonable
out-of-pocket expenses incurred in accordance with the Company's then existing
policies, upon timely submission and approval of written statements and bills in
accordance with the Company's applicable expense reimbursement and related
policies and procedures as in effect from time to time. Notwithstanding the
foregoing, after notice of termination of employment by the Company or
Executive, Executive shall be entitled to reimbursement of such expenses
incurred after the date of such notice of termination only if approved in
advance by the Chief Executive Officer of the Company.
8. Arbitration. Any dispute arising out of, or in any manner relating to, this
Agreement or the termination of Executive's employment with the Company, other
than injunctive relief pursuant to Section 6(f), shall be resolved in
arbitration before a panel of three arbitrators before the American Arbitration
Association in the City of New York according to its then existing commercial
rules and regulations. The parties agree that in any such arbitration, the
arbitrators shall not have the power to reform or modify this Agreement in any
way and to that extent their powers are so limited. The parties also agree that
in any such arbitration, the arbitrators may not award punitive damages to any
party, and, in the absence of an arbitrators' award, the costs of such
arbitration shall be borne equally by the parties. The arbitration award shall
state the reasons therefor and the determination of the arbitrators shall be
final and binding on the parties hereto and judgment thereon may be entered in
any court of competent jurisdiction. Except as required by law, neither the
Company nor Executive shall issue any press release or make any statement which
is reasonably foreseeable to become public with respect to any arbitration or
any proceedings in connection therewith without receiving the prior written
consent of the other party to the content of such press release or statement.
9. Entire Agreement. This Agreement represents the entire understanding among
the parties relating to the subject matter hereof, supersedes all prior oral or
written understandings and agreements relating hereto, and may not be amended,
terminated or discharged except in writing signed by all of the parties hereto.
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10. Assignment; Binding Effect. Executive shall not assign or otherwise transfer
its rights or obligations hereunder and such rights shall not be subject to
commutation, encumbrance, or the claims of creditors, and any attempt by
Executive to do any of the foregoing shall be void and of no force or effect.
The provisions of this Agreement shall be binding upon and inure to the benefit
of Executive and Executive's heirs and personal representatives, and shall be
binding upon and inure to the benefit of the Company and its successors and
assigns.
11. Notice. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or delivered by courier, by hand or by telecopy against
receipt to the party to whom it is to be given at the address of such party set
forth in this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 11) and
with a copy, in the case of the Company, to the General Counsel at the address
set forth in this Agreement. Notice to Executive's estate shall be sufficient if
addressed to Executive as provided in this Section 11. Any notice or other
communication shall be deemed given at the time of receipt thereof.
12. Governing Law. This Agreement shall be deemed entered into in the State of
New York and shall be governed in all respects by the laws of New York
applicable to agreements made and to be performed therein, without giving effect
to conflicts of law principles. For purposes of Section 6(f) and except as
specifically provided in Section 8, the Executive and the Company both consent
to the jurisdiction of the state courts of the State of New York and the Federal
courts whose districts encompass any part of New York in connection with any
dispute arising under this Agreement and hereby waive, to the maximum extent
permitted by law, any objection based on forum non conveniens, to the conducting
of any such proceeding in such jurisdiction. The Executive and the Company each
consents to service of process in any action brought in such courts by
registered or certified mail sent to the address indicated on the first page
hereof. The Executive and the Company both waive trial by jury in connection
with the trial of any action or dispute in connection with-this Agreement or
matters of a similar nature.
13. Waiver. Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing,
signed by the party giving the waiver.
14. Separability. If any provision of this Agreement shall be deemed to be
invalid, illegal, or unenforceable by reason of the extent, duration, or
geographical scope thereof, or otherwise, then the parties agree that the
arbitration panel making such determination shall reduce such extent, duration,
geographical scope, or other provisions hereof to the extent required to render
them valid, legal, and enforceable, and in its reduced form such restriction
shall then be enforceable in the manner contemplated hereby.
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15. Representations. Executive represents and warrants that the entering into
and performance of this Agreement will not be in violation of any other
agreement to which Executive is a party and no activities of Executive currently
conflict with the non-competition provisions provided herein.
If the foregoing is correct, please sign and return to us a copy of this letter
agreement, which when signed shall constitute a binding agreement.
Xxxxxx A.S.L., Ltd.
By: /s/ Xxxx X. Idol
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Xxxx X. Idol, Chief Executive Officer
Agreed to:
/s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx
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