Exhibit 10.2.
EMPLOYMENT AGREEMENT
AGREEMENT made as of June 15, 1999 (the "Employment Commencement Date") by
and between XXXXX APPAREL GROUP, INC., a Pennsylvania corporation (the
"Company"), and XXXX X. XXXXXXXX (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company wishes to employ the Executive, and the Executive
wishes to enter into employment with the Company, on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, it is agreed as follows:
1. Employment. (a) During the term of this Agreement, Company shall employ
the Executive (i) during the "Transition Period" (as herein defined) as
Chairman and Chief Executive Officer of Nine West Group Inc. ("NWG"), the
Company's wholly-owned subsidiary, and (ii) thereafter with such
responsibilities as the Company and the Executive shall mutually agree, each
acting in his sole discretion. The Executive shall report directly to the
Chief Executive Officer of the Company. During the Transition Period, and
excluding any periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote all of Executive's business time and
attention to the business affairs of the Company, and to perform such
responsibilities in a professional manner. Notwithstanding the foregoing,
during the term of this Agreement, it shall not be a violation of this
Agreement for the Executive to (w) serve on civic or charitable boards or
committees, or corporate boards (subject to Section 9 hereof); (x) deliver
lectures, fulfill speaking engagements or teach at educational institutions;
(y) oversee the affairs of Palladin Capital Group, Inc. ("Palladin") (subject
to Section 9 hereof); and (z) attend to personal business, so long as such
activities do not interfere with the performance of the Executive's
responsibilities hereunder.
(b) It is the intention of the parties that Executive's primary
objectives immediately following the Employment Commencement Date shall be the
management of NWG, the initiation of certain rationalization and cost-reduction
programs and the assessment and, as appropriate, the retention and realignment
or reassignment, of the senior executive staff of NWG. The "Transition Period"
shall commence with the Employment Commencement Date and shall end with the
completion of those objectives, as determined by the Chief Executive Officer of
the Company, but shall not exceed the Term, unless the Company and the
Executive shall mutually agree. During the Transition Period, Executive shall
maintain his primary office at the offices of NWG in White Plains, New York.
2. Term.
The term of this Agreement (the "Term") shall be for the period commencing on
2
June 15, 1999 and ending on June 14, 2001 (the "Expiration Date").
3. Salary, Fringe Benefits and Allowances.
(a) Throughout the Term, the Executive shall receive a salary at the
annual rate of not less than $850,000. The Executive's salary shall be payable
at such regular times and intervals as the Company customarily pays its
executive employees from time to time, but no less frequently than once a
month.
(b) During the Term, the Executive shall be eligible to participate in
all savings and retirement plans, practices, policies and programs in effect at
the end of the Transition Period, to the extent applicable generally to other
senior executive employees of the Company.
(c) During the Term, the Executive and/or the Executive's family, as the
case may be, shall be eligible for participation in and shall receive all
benefits under welfare, fringe and other benefit plans, practices, policies and
programs in effect at the end of the Transition Period, provided by the Company
(including, without limitation, medical, prescription drug, dental, disability,
accidental death and travel accident insurance plans and programs) to the
extent applicable generally to other senior executives of the Company.
(d) The Executive shall be entitled to an aggregate of four (4) weeks
paid vacation during each calendar year of the Term. The Executive shall also
be entitled to the benefits of the Company's policies relating to sick leave
and holidays.
(e) The Executive shall have all expenses reasonably incurred by
Executive on behalf of the Company reimbursed by the Company in accordance with
the Company's standard policy and practice. For air travel on Company
business, the Executive shall be entitled to first class travel.
(f) During the Transition Period, the Company shall make available to
the Executive all perquisites that are made available to senior executives of
the Company.
4. Bonus.
Within 90 days following the end of (a) each calendar year during the Term
and (b) the Termination Date, Executive shall receive an annual bonus equal to
the Target Bonus (as defined herein) for the applicable period.
5. Stock Options. (a) Subject to the absolute authority of the Stock
Option Committee of the Board of Directors of the Company from time to time to
grant (or not to grant) to eligible individuals options to purchase common
stock ("Common Stock") of the Company ("Options"), it is the intention of the
Company and the expectation of the Executive that the Executive will receive a
one-time grant of Options to purchase 467,000 shares of Common Stock, on the
following terms and conditions:
2
3
(i) the exercise price per share of the Options shall be the fair market
value of the common stock on the date of grant;
(ii) the Options shall vest ratably on the first two anniversaries of
the date of grant, or at the end of the Transition Period, whichever first
occurs; and
(iii) the Options shall expire on the tenth anniversary of the date of
grant, without regard to the termination of the employment of the Executive for
any reason.
(b) The Options shall be granted on such other terms and conditions as
are generally made applicable to Options granted to the other senior executives
of the Company.
(c) If any term or condition of the agreement evidencing the grant of
options is inconsistent herewith, the terms of this Section 5 shall be
controlling and binding on the Company and the Executive.
6. Termination of Employment.
(a) By the Company for Cause, or by the Executive without Good Reason.
The Company may terminate the Executive's employment for Cause (as defined
herein) before the Expiration Date. If the Executive's employment is
terminated for Cause, or if Executive resigns during the Term without Good
Reason (as defined below), the Company shall pay to the Executive any unpaid
salary through the date of termination, as well as reimburse the Executive for
any unpaid reimbursable expenses incurred on behalf of the Company, and
thereafter the Company shall have no additional obligations to the Executive
under this Agreement.
(b) By the Company without Cause, or by the Executive following the
Transition Period or for Good Reason; Death or Disability. The Company may
terminate the Executive's employment before the Expiration Date without Cause,
and the Executive may terminate Executive's employment before the Expiration
Date either by reason of the Transition Period's having ended or for Good
Reason, upon 30-days written notice to the other party. If the Executive's
employment is so terminated by the Company without Cause, or by the Executive
either by reason of the Transition Period's having ended or for Good Reason, as
the case may be, or if the Executive's employment terminates before the
Expiration Date because of Executive's death or Disability (as defined herein),
the Company shall pay and provide to the Executive or the Executive's duly
appointed personal representative, as the case may be, (i) any unpaid salary
through the date of termination, as well as reimbursement of any unpaid
reimbursable expenses incurred on behalf of the Company, (ii) the Target Bonus
for the fiscal year in which termination occurs, prorated for the portion of
such year preceding termination, (iii) during each month of the Severance
Period (as defined below), an amount equal to the sum of (x) Executive's
monthly salary at the rate in effect immediately preceding termination and (y)
one-twelfth of the Executive's Target Bonus for the year in which termination
occurs (the aggregate of such monthly payments in clauses "(x)" and "(y)" being
herein referred to as the "Severance Period Compensation"), (iv) throughout the
Severance Period, continuation of Executive's participation
3
4
(including the Company's contributions thereto) in all benefit plans and
practices which were in effect at the end of the Transition Period and which,
at the end of the Transition Period, Executive either was participating or in
which Executive was eligible to participate, provided however, that in the
latter case, Executive indicates his intention to participate in writing within
30 days following termination, and (v) other than with respect to termination
by reason of death or Disability, reimbursement to the Executive for up to
$10,000 of executive outplacement services. Except as set forth in this
Subsection 6(b), the Company shall not have any additional obligations to the
Executive under this Agreement in the event of Executive's termination of
employment under this Subsection 6(b).
(c) Change of Control. If, following a "Change of Control" (as defined
herein) and prior to the Expiration Date, the Company terminates the
Executive's employment without Cause, or the Executive terminates employment
hereunder for Good Reason, the Company shall pay to the Executive, within 20
days following termination, (i) any unpaid salary through the date of
termination, as well as reimbursement of any unpaid reimbursable expenses
incurred on behalf of the Company, (ii) the Target Bonus for the fiscal year in
which termination occurs, prorated for the portion of such year preceding
termination, (iii) a lump-sum payment equal to the product of (x) the sum of
(q) Executive's yearly salary at the rate in effect immediately preceding
termination and (r) Executive's Target Bonus for the year in which termination
occurs, multiplied by (y) a fraction, the numerator of which is the number of
whole months remaining in the Term and the denominator of which is 36, (iv) a
lump-sum equal to the Company's cost for health insurance, life insurance and
retirement benefits for the Severance Period, and (v) reimbursement to the
Executive for up to $10,000 of executive outplacement services.
(d) Buyout/Payout Following the Transition Anniversary Date. (i) Upon 30-
days written notice from either party to the other party, effective on such
date, which (other than as provided in Section 6(d)(ii) hereof) shall be no
earlier than the Transition Anniversary Date, as provided in such notice (the
"Acceleration Date"), (i) the Company may either terminate the Executive's
employment and make the Acceleration Payment (as herein defined) to the
Executive on the Acceleration Date, or, ir Executive's employment has
previously been terminated and Executive then is receiving Severance Period
Compensation, make the Acceleration Payment to the Executive on the
Acceleration Date, and (ii) the Executive may either terminate Executive's
employment and receive from the Company the Acceleration Payment on the
Acceleration Date, or, if Executive's employment has previously been terminated
and Executive then is receiving Severance Period Compensation, receive from the
Company the Acceleration Payment on the Acceleration Date, in all such events
on the following terms and conditions:
(x) The Acceleration Payment shall be equal to the present value of
the Severance Period Compensation on the Acceleration Date,
discounted at an annual rate of 7.5%; and
(y) from and after the Acceleration Date, the non-competition
4
5
restrictions of Section 9(a)(i) hereof shall terminate.
(ii) If, prior to the Transition Anniversary Date, the Executive gives
the required notice to the Company that he is terminating his employment solely
by reason of the Transition Period's having ended, the Company, upon 10-days
written notice to the Executive, may elect to make the Acceleration Payment to
the Executive on the employment termination date set forth in Executive's
notice to the Company. If the Company makes such election, the terms and
conditions of Section 6(d)(i) shall apply and the payment date of the
Acceleration Payment shall become the Acceleration Date.
(e) As used herein:
(i) the term "Cause" shall mean (v) the Executive's commission of an act
of fraud or dishonesty or a crime involving money or other property of the
Company; (w) the Executive's conviction of a felony or a plea of guilty or nolo
contendere to an indictment for a felony; (x) if, in carrying out Executive's
duties hereunder, the Executive engages in conduct which constitutes willful
misconduct or gross negligence; (y) the Executive's failure to carry out a
lawful order of the Board of Directors of the Company or its Chief Executive
Officer; or (z) a material breach by the Executive of this Agreement. Any act
or failure to act on the part of the Executive which is based upon authority
given pursuant to a resolution duly adopted by the Board of Directors of the
Company or authorized in writing by the Chief Executive Officer of the Company,
or based upon the advice of counsel for the Company, shall not constitute Cause
as used herein. For purposes of this provision only, a breach shall be
"material" if it is demonstrably injurious to the Company, its affiliates or
any of its respective business units, financially or otherwise.
Cause shall not exist unless and until the Company (i) has delivered to
the Executive a written Notice of Termination that specifically identifies the
events, actions, or non-actions, as applicable, that the Company believes
constitute Cause hereunder, and, in the case of termination for Cause under
clauses (x), (y) or (z) above, the Executive has been provided with an
opportunity to cure the offending conduct (if curable) within 30 days after
delivery of the written Notice of Termination, and has not so cured such
conduct (if curable), and (ii) the Executive has been provided an opportunity
to be heard (with counsel) within 30 days after delivery of the notice of
Termination; provided, however, that in the case of termination for Cause under
clauses (x), (y), and (z) above, the date of termination shall be no earlier
than 35 days after delivery of the Notice of Termination.
(ii) the term "Good Reason" shall mean any one of the following:
(1) a material breach of the Company's obligations under this
Agreement, which breach has not been cured within 20 business days after the
Company's receipt of written notice from the Executive of such breach;
(2) a reduction in the Executive's then annual base salary;
5
6
(3) the relocation by the Company of the Executive's office to a
location (other than White Plains, New York) more than 30 miles from the
Company's offices at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx;
(4) the failure to pay the Executive any undisputed portion of the
Executive's compensation within 15 business days after the date of receipt of
written notice that such compensation or payment is due;
(5) the failure to continue in effect any compensation or benefit
plan in which the Executive is participating or in which Executive is eligible
to participate, in each case as of the end of the Transition Period, unless
either (i) an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan; or (ii) the failure
to continue the Executive's participation therein (or in such substitute or
alternative plan) does not discriminate against the Executive, both with
respect to the amount of benefits provided and the level of the Executive's
participation, relative to other similarly situated participants; or
(6) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted in this Agreement.
(iii) the terms "Disabled" or "Disability" shall mean the Executive's
physical or mental incapacity which renders the Executive incapable, even with
a reasonable accommodation by the Company, of performing the essential
functions of the duties required of Executive by this Agreement for 120 or more
consecutive days.
(iv) the term "Severance Period" shall mean the period commencing with
the event giving rise thereto (e.g. termination of the Executive's employment
by the Company) and ending with the Expiration Date.
(v) the term "Target Bonus" shall mean 75% of Executive's annual salary
for any given year during the Term.
(vi) the term "Transition Anniversary Date" shall mean the first
anniversary of the date on which the Transition Period ends.
(vii) A "Change of Control" shall be deemed to have occurred if,
following the date of this Agreement:
(i) an individual, corporation, partnership, group, associate or
other entity or "person", as such term is defined in Section
14(d) of the Securities Exchange Act of 1934 (the "Exchange
Act"), becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of 25% or more
of the combined voting power of the Company's outstanding
securities
6
7
ordinarily having the right to vote at elections of directors; or
(ii) individuals who constitute the Company's Board of Directors on
the date hereof cease for any reason to constitute at least a
majority thereof, other than as a result of the death,
resignation or removal of such individuals (and the appointment
of alternates to fill the vacancies thus created); or
(iii)the Company consummates a plan or agreement providing (a) for a
merger or consolidation of the Company other than with a wholly-
owned subsidiary, and other than a merger or consolidation that
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or (b) for a sale, lease exchange and/or other
disposition of all or substantially all of the assets of the
Company.
(d) The Executive shall have no obligation to seek other employment or
otherwise mitigate the Company's obligations to make payments under this
Section 6, and the Company's obligations shall not be reduced by the amount, if
any, of other compensation or income earned or received by the Executive after
the effective date of Executive's termination.
7. Company Property. Any trade name or xxxx, program, discovery, process,
design, invention or improvement which the Executive makes or develops, which
relates, directly or indirectly, to the business of the Company or its
affiliates, or Executive's employment by the Company, shall be considered as
"made for hire" and shall belong to the Company and shall be promptly disclosed
to the Company. During the Executive's employment and thereafter, the
Executive shall, without additional compensation, execute and deliver to or as
requested by the Company, any instruments of transfer and take such other
action as the Company may reasonably request to carry out the provisions
hereof, including filing, at the Company's sole expense, trademark, patent or
copyright applications for any trade name or xxxx, invention or writing covered
hereby and assigning such applications to the Company.
8. Confidential Information. The Executive shall not, either during the
term of Executive's employment by the Company or thereafter, disclose to anyone
or use (except, in each case, in the performance of Executive's responsi-
bilities hereunder and in the regular course of the Company's business), any
information acquired by the Executive in connection with or during the period
of Executive's employment by the Company, with respect to any confidential,
proprietary or secret aspect of the affairs of the Company or any of its
affiliates, including but not limited to the requirements and terms of
dealings with existing or potential licensors, licensees, designers, suppliers
and customers and methods of doing business, all of which the Executive
7
8
acknowledges are confidential and proprietary to the Company, and any
of its affiliates, as the case may be. Confidential information shall not
include (a) information already in the public domain, (b) information
previously revealed by a third party not in violation of this Agreement or any
agreement of confidentiality binding on such party or ( c) information already
known by the recipient. Further, Executive shall not be in violation of this
Section 8 if he reveals confidential, secret or proprietary information only
(y) in response to compulsory process or other legal compulsion, or (3) in a
proceeding authorized herein, in either which event he shall first, to the
extent practicable, given prior written notice to the Company.
9. Competition; Recruitment; Non-Disparagement.
(a) Except to the extent provided for in clause (d) hereof, the
Executive shall not, at any time during Executive's employment by the Company
and during the following periods (the "Non-Compete Period") and under the
following circumstances, engage or hold an economic interest (as an owner,
stockholder, partner, officer, or employee) in any business which then
competes, directly or indirectly, with the business conducted by the Company or
any of its subsidiaries or affiliates at the time of Executive's termination of
employment:
(i) during the Severance Period (provided that the Company is making
the payments to Executive required hereby during such Severance Period); and
(ii) if the Company shall have given Executive written notice thereof
prior to termination of employment by the Company with Cause, or within 10 days
thereafter in the event of termination by the Executive without Good Reason,
during a period equal to the Severance Period, provided that the Company shall
pay to the Executive during such period monthly payments equal to the sum of
(x) Executive's monthly salary at the rate in effect immediately preceding
termination and (y) one-twelfth of the Executive's Target Bonus for the year in
which termination occurs.
(b) The Executive shall not, at any time during Executive's employment
by the Company and thereafter during the period ending one year immediately
following the Transition Anniversary Date, recruit, solicit for employment,
hire or engage, or assist any person or entity in recruiting, soliciting for
employment, hiring or engaging, any employee of the Company, any of its
subsidiaries or affiliates or any person who was an employee of the Company,
any of its subsidiaries or affiliates within one year before the termination of
the Executive's employment; provided that the foregoing restrictions shall in
no event apply to any person who was an employee of Palladin immediately prior
to June 15, 1999.
(c) For the longer of any period applicable under this Section 9 or a
period of three years immediately following the date of termination, (i) the
Company, and its respective affiliates and employees shall not disparage the
Executive, and (ii) the Executive shall not disparage the Company, or its
respective affiliates and employees.
(d) The Executive acknowledges that these provisions are necessary for
8
9
the protection of the Company, and its subsidiaries and affiliates and are not
unreasonable, because the Executive would be able to recruit and hire personnel
other than employees of the Company, and any of their subsidiaries and
affiliates. The Executive further agrees that a breach of Section 7, 8 or 9 of
this Agreement that causes material damage to the Company shall result in the
immediate cessation of any payments pursuant to this Section 9 and Section 6
hereof, if applicable. The duration and the scope of these restrictions on the
Executive's activities are divisible, so that if any provision of this Section
9 is held or deemed to be invalid, that provision shall be automatically
modified to the extent necessary to make it valid. The ownership of less than
5% of the stock or other form of equity of a publicly owned company which
competes with the Company, any of its subsidiaries or affiliates, in and of
itself, shall not be considered a violation of the provisions of this Section
9. Neither Executive's employment (following termination of Executive's
employment with the Company) with nor holding an economic investment in any
consulting, investment banking, investment fund or similar independent person
or entity shall constitute competition prohibited hereby even if such person or
entity holds equity or debt interests in, or renders advisory services to, a
competitor, so long as Executive does not himself actively engage (directly or
indirectly) in rendering such services to such competitor.
10. Notices. Any notice or other communication to the Company or to the
Executive under this Agreement shall be in writing and shall be considered
given when personally delivered, sent by prepaid courier or mailed by certified
mail, return receipt requested, to such party at Executive's address below, or
to the Company at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General
Counsel (or at such other address as such party may specify by written notice
to the other party).
11. Successors; Binding Agreement.
(a) Company's Successors. No rights or obligations of the Company under
this Agreement may be assigned or transferred by the Company, except that such
rights or obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity, or the sale or
liquidation of all or substantially all of the business or assets of the
Company, provided that the assignee or transferee is the successor to all or
substantially all of the business or assets of the Company and such assignee or
transferee assumes all of the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or as a matter of
law. The Company will require any such successor to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business or assets as aforesaid, which
executes and delivers the agreement provided for in this Section 11 or which
otherwise becomes bound by all the terms and provisions of this Agreement or by
operation of law.
(b) Executive's Successors. This Agreement shall not be assignable by
the Executive. This Agreement and all rights of the Executive hereunder shall
inure to the benefit of
9
10
and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,devisees and
legatees. Upon the Executive's death, all amounts to which Executive is
entitled hereunder, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's devisee,
legatee, or other designee or, if there be no such designee, to the Executive's
estate.
12. Indemnification. The Company shall indemnify Executive and hold the
Executive harmless, to the maximum extent permitted by applicable law, from and
against all claims, actions, suits, proceedings, loss, damage, liability,
costs, charges and expenses, including reasonable attorneys' and other
professional's fees and costs arising in connection with the Executive's
performance of Executive's duties hereunder or Executive's status as an
employee, officer, director or agent of the Company or its affiliates, in
accordance with the Company's indemnity policies for its senior executives in
effect as of the Employment Commencement Date, or if more favorable to the
Executive, as subsequently amended.
13. Interest on Late Payments. "Undisputed Late Obligations" shall bear
interest beginning on the Due Date until paid in full at an annual rate of one
percent (1.0%) plus the prime rate as declared from time to time by First Union
National Bank. For purposes hereof, "Undisputed Late Obligations" shall mean
any obligation which remains unpaid 5 days after written notice thereof is
delivered to the other party in accordance with Section 10 (the "Due Date") for
money under this Agreement owing from one party to another, which obligation
(i) is not subject to any bona fide dispute or (ii) has been adjudicated by an
arbitration panel or court of competent jurisdiction to be due and payable.
14. Arbitration.
(a) In the event of any dispute, controversy or claim between the
parties hereto arising out of or relating to this Agreement, including any
dispute as to the construction, validity, enforceability or breach of this
Agreement or the arbitrability of any issue arising hereunder (each a
"dispute"), representatives of the parties shall meet at a place mutually
agreed upon by such parties as soon as reasonably possible (but not later than
ten (10) days after notice from any party hereto to the other that the party
giving notice has such a dispute) and shall enter into good faith negotiations
aimed at resolving the dispute. If they are unable to resolve the dispute in a
mutually satisfactory manner within ten (10) days from the date of such
meeting, they shall proceed as set forth below.
(b) First, the parties shall endeavor to: (i) choose a mutually
acceptable alternative dispute resolution ("ADR") mechanism, including without
limitation choosing one or more third party arbitrators; and (ii) set forth the
general framework for the ADR process. If the parties are unable to agree to a
mutually acceptable ADR mechanism within ten (10) days from the date of the
initial proposal from any party with respect thereto, the parties shall enter
into binding arbitration as set forth below.
(c) All disputes among the parties arising out of or relating to this
Agreement that
10
11
are not resolved by good faith negotiations between the parties or by an ADR
mechanism as set forth above shall be resolved solely by binding arbitration
pursuant to the United States Arbitration Act, 9 U.S.C. Section 1 et seq.
Either party may commence arbitration proceedings at any time after the
fifth day after delivery of notice from one party to the other of the
inability of the parties to agree upon a mutually acceptable ADR mechanism as
set forth above.
(d) Any arbitration shall be conducted in the New York City metropolitan
area (or such other area mutually agreeable to all parties) before a single
arbitrator mutually selected by the parties thereto or, in the event the
parties shall fail to agree, by a three-person panel selected and acting
pursuant to the Commercial Arbitration Rules and, if applicable at such time,
the Streamlined Arbitration Rules and Procedures then in effect of the AAA.
Any three person arbitration panel shall consist of one arbitrator selected by
each disputing party within ten (10) days of the initiation of binding
arbitration, as provided herein, and one arbitrator (who shall become the
presiding arbitrator) selected by the first two arbitrators within ten (10)
days of the latter of the first two arbitrators' acceptances to act as
arbitrators. In the event that any disputing party shall fail to appoint
timely an arbitrator, or in the event that the first two arbitrators fail to
reach agreement within 10 days as to the presiding arbitrator, any disputing
party may request the AAA to appoint such arbitrator. Before submitting a list
of potential arbitrators to the parties for their consideration, the AAA shall
consult with each party to discuss the applicable qualifications for the
proposed arbitrators. Each arbitrator shall be a currently licensed lawyer in
the United States of America with at least ten (10) years experience in
commercial practice in the United States.
(e) Unless otherwise agreed by the disputing parties prior to the
commencement of the arbitration:
(i) The parties shall commence arbitration proceedings within thirty
(30) days of the selection of the presiding arbitrator.
(ii) The presentation of evidence and all discovery shall be
controlled by the arbitrator/panel, with a preference to be shown
for written discovery over depositions. The arbitrators shall
have the right to employ experts to assist them in any
arbitration proceeding.
(iii)The arbitrator(s) shall be and remain at all times wholly
independent and neutral.
(iv) If either party so requests, the decision of the arbitrator/panel
shall be reduced to writing and shall set forth the
arbitrator/panel's findings of fact and conclusions of law. The
arbitrator/panel shall afford any such remedy as is within the
scope of the Agreement (including equitable relief) or otherwise
appropriate under applicable law.
(v) The award shall be made on an expedited basis within thirty (30)
11
12
days of a hearing, or if there is not a hearing, within thirty
(30) days of the submission of all papers.
(vi) The award shall include as part of the arbitrator/panel's
determination the responsibility among the parties for payment of
the arbitrator/panel/s fees and expenses.
(vii)The award shall be final and binding upon the parties, without
any further right of appeal absent fraud or intentional
malfeasance by the arbitrator/panel, and may be entered for
enforcement in any court of competent jurisdiction or an
application may be made to any such court for a judicial
acceptance of such award and an order of enforcement, as
applicable. Any monetary award shall be promptly paid by the
losing party to the prevailing party, free of deduction or offset
except as provided for in the award, with interest thereon as
otherwise provided in this Agreement from the date of any breach
or violation of this Agreement (as determined as part of the
award) to but not including the date of payment. To the extent
allowed by applicable law, any losing party resisting payment of
any such award shall also be responsible for reimbursing the
prevailing party for any fees and expenses incurred by such
prevailing party incident to the enforcement thereof.
(f) Each party will participate in any such arbitration in good faith
and will (and will direct its representatives, employees and affiliates to, and
will request each other participant in any ADR mechanism and each arbitrator
to) hold the existence, content and result of any dispute in confidence except
to the extent that disclosure of any such information is required by law.
(g) The arbitration will proceed in the absence of a disputing party
who, after due notice, fails to answer or appear. An award shall not be made
solely upon the default of any such party, but the arbitrator/panel shall
require each party that is present to submit such evidence as the
arbitrator/panel may determine is reasonably necessary to make an award.
(h) If an arbitrator, whether sole or part of a panel, should withdraw,
die or otherwise become incapable of serving, or should such arbitrator refuse
to serve, a successor arbitrator shall be selected and appointed in the same
manner as the original arbitrator and, subject to the rules applicable to the
ADR process or arbitration applicable in such circumstances, the dispute
resolution process shall continue.
(i) This Article 14 shall be a complete defense to any suit, action or
proceeding instituted before any court or agency with respect to any matter
resolvable hereunder, provided, however, that, notwithstanding this provision,
any party may seek interim judicial relief to preserve the status quo pending
arbitration, in aid of ADR or arbitration or to enforce any award hereunder.
12
13
15. Fees and Costs. The Company shall reimburse the Executive (or the
Executive shall reimburse the Company) for all reasonable costs, including
without limitation reasonable attorneys' and other professional's fees, of the
Executive or the Company, as the case may be, in any dispute, arbitration or
proceeding arising under this Agreement (collectively, a "Proceeding"), so long
as the Executive or the Company, as the case may be, "prevails in substantial
part" with respect to Executive's or the Company's claims or defenses in such
Proceeding provided, however, that in no event shall the reimbursing party be
required to pay to the other party an amount greater than the reimbursing party
paid for its/his own legal costs related to the issue in question. For
purposes hereof, the Executive shall be deemed to have "prevailed in
substantial part" if (i) the Executive is the party originally demanding a
Proceeding, and the arbitrator(s) shall have awarded the Executive at least 75%
of the amount originally demanded by the Executive, or (ii) the Company is the
party originally demanding a Proceeding, and the arbitrator(s) shall have
denied the Company the relief originally requested. The Company shall be
deemed to have "prevailed in substantial part" if (i) the Executive is the
party originally demanding a Proceeding and the arbitrator(s) shall have
awarded the Executive less than 25% of the amount originally demanded by the
Executive or (ii) the Company is the party originally demanding a Proceeding
and the arbitrator(s) shall have granted Company the relief originally
requested.
16. Miscellaneous.
(a) Given that a breach of the provisions of this Agreement would injure
the Company irreparably, the Company may, in addition to its other remedies,
obtain an injunction or other comparable relief restraining any violation of
this Agreement, and no bond, security or other undertaking shall be required of
the Company in connection therewith.
(b) The provisions of this Agreement are separable, and if any provision
of this Agreement is invalid or unenforceable, the remaining provisions shall
continue in full force and effect.
(c) This Agreement constitutes the entire understanding and agreement
between the parties, supersedes all other existing agreements between them and
cannot be amended, unless such amendment is in writing and signed by both
parties to this Agreement.
(d) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York (without regard to any otherwise applicable
choice of laws rules), where it has been entered and where it is to be
performed. To the extent this Agreement provides for or allows judicial
relief, the parties hereto consent to the exclusive jurisdiction of any federal
or state court in the State of New York to resolve any dispute arising under
this Agreement or otherwise.
(e) The headings in this Agreement are solely for convenience of
reference and shall not affect its interpretation.
13
14
(f) The failure of either party to insist on strict adherence to any
term of this Agreement on any occasion 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. For any waiver of a provision
of this Agreement to be effective, it must be in writing and signed by the
party against whom the waiver is claimed.
(g) The obligations of the Executive and the Company hereunder shall
survive the termination of the term of this Agreement and the Executive's
employment hereunder, to the extent necessary to give full effect to the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the date first above written.
XXXXX APPAREL GROUP, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------
Chairman and Chief Executive Officer
/s/ Xxxx X. Xxxxxxxx
--------------------------
Executive
Address: 00 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
14
