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EXHIBIT 10(w)(ii)
Xxxxxx X. Xxxxxx
February 6, 2001
Separation Agreement & Release of Claims
The following constitutes a complete separation agreement and release of claims
(hereinafter "Agreement") between you (including your successors, assigns and
estate, collectively referred to as the "Associate") and Liz Claiborne, Inc.
(including its subsidiaries, affiliates, officers, directors, agents,
associates, successors, predecessors and assigns, collectively referred to as
the "Company") regarding the terms of your employment and termination of
employment at the Company.
1. Associate's employment with the Company is terminated effective as of
December 8, 2000 (the "Termination Date").
2. Following the effective date of this Agreement, the Company will:
(i) pay as severance to Associate, the total sum of One Million Dollars
and 00/100 ($1,000,000.00) ; less applicable deductions. The amount
set forth in this Section 2(i) will be paid in a lump sum within ten
(10) days following the effectiveness of this Agreement;
(ii) pay Associate an additional lump sum amount of One Hundred Two
Thousand Eight Hundred One Dollars and 75/100 ($102,801.75) , less
applicable deductions, payable within ten (10) days following the
effective date of this Agreement; .
(iii)if Associate elects Cobra coverage, reimburse Associate up to Four
Hundred Five Dollars and 35/100 ($405.35) a month, representing
Associate's monthly Cobra premium payments through the earlier of (i)
the date Associate becomes eligible for coverage under any group
health plan as a result of Reemployment (defined below); and (ii)
December 31, 2001;
(iv) pay Associate the amount she would have received, less applicable
deductions, as a result of the Company's contribution to the profit
sharing component of the Liz Claiborne 401(k) Savings & Profit Sharing
Plan and the amount she would have received, less applicable
deductions, under the Company's "matching" arrangement as allowed
under the Supplemental Executive Retirement Plan (the "SERP Plan"),
had she been an active associate of the Company on December 31, 2000.
Such payment shall be made at the same time that active Company
associates eligible for such payments have such payments processed to
their accounts under the applicable plan; and
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(v) pay Associate a Year 2000 bonus in accordance with the Company's Pay
for Performance Plan, without reduction based on her termination of
employment and determined in good faith based on specified performance
criteria. Such bonus will be paid to Associate in March 2001, at the
same time as other senior executives of the Company receive their Year
2000 Pay for Performance bonus.
Except as specifically set forth above or herein, all other nonstatutory
benefits, including, without limitation, short & long term disability,
accidental death and dismemberment, life insurance, and spouse and
dependent life insurance will cease on the day following your termination
date, except for conversion rights provided under such benefit plan or
applicable law. "Reemployment" as used in this Agreement shall mean
commencement of full-time employment with a company other than the Company
or an entity primarily owned by Associate and used by Associate to do
consulting. Associate agrees to notify Company of Associate's Reemployment
within seventy-two (72) hours of such Reemployment.
3. Associate shall be entitled to receive financial counseling services
provided by a third party group which has been retained by the Company, on
such terms as are made available to other senior Company executives of a
comparable level, for a period of one (1) year following Associate's
Termination Date.
4. The Company shall reimburse Associate all reasonable and necessary
out-of-pocket business expenses incurred through the Termination Date in
accordance with the Company's standard policy in effect at such time.
5. The parties hereto acknowledge that the Agreement dated September 26, 1996,
as amended by letter agreement dated February 19, 2000 (collectively the
"Employment Agreement") shall be deemed terminated as of the Termination
Date, except the provisions therein which by their terms survive. Section
7(b) of the Employment Agreement (which Section by its terms survives the
Associate's termination of employment) shall be deemed amended to delete
Xxxxxx Xxxxx, Inc., Xxxxx Karan International, Inc. and Xxxx Xxxxx Xxxxxx
Corporation from the definition of "Competing Business" set forth therein.
Associate acknowledges that Sections 6 & 7 (as amended herein) & 8 of her
Employment Agreement shall survive the termination of her employment with
the Company.
6. Associate shall be entitled to use the Company's designated outplacement
service at the Company's expense for up to one (1) year following the
Termination Date, unless Reemployment occurs beforehand. In lieu of using
the outplacement service's offices to conduct a job search (but without
waiving Associate's right to use the assistance of the outplacement
service), Associate shall have the option of using an office designated by
Company, at Company's offices in the Empire State Building in New York City
(the "Facility") during normal business hours to conduct her job
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search, until the earliest of (a) the date Associate finds Reemployment;
(b) December 31, 2001; and (c) the date the Company ceases operations at
the Facility. The earliest of such dates shall be known as the "Facility
Use Expiration Date". Use of such office shall include the reasonable use
of Company's telephone system. In addition, Company shall provide Associate
with secretarial assistance (who shall be Associate's former secretary, if
available) for up to three (3) days a week during normal business hours
until the Facility Use Expiration Date. If the Facility Use Expiration Date
occurs prior to the earlier of (i) the date Associate finds Reemployment,
and (ii) December 31, 2001 (such earlier date to be known as the
"Outplacement Service Expiration Date"), Associate shall thereafter be
entitled to use the offices of the Outplacement Service to conduct her job
search until the Outplacement Service Expiration Date.
7. (a) The terms of the Associate's stock option awards, granted as of January
6, 1998, January 4, 1999 and January 25, 2000, shall each be amended to
provide that the options under such awards scheduled to vest in January
2001 and January 2002 (as set forth on Annex A attached hereto) shall vest
instead as of the Termination Date. Such options shall otherwise be subject
to the terms provided for in such awards, except to the extent otherwise
provided for in clause (b) below with respect to the applicable exercise
period.
(b) The terms of all of the Associate's outstanding stock options vested as
of the Termination Date (including those options whose vesting is
accelerated under clause (a) above) shall be amended to provide that the
Associate may exercise such vested options for the twelve (12) month period
following the Termination Date on such terms and conditions as provided for
under such awards.
8. Section 3.1 of the Associate's Restricted Transformation Share Agreement,
dated as of January 6, 1998 (the "Agreement"), shall be amended to permit
the Associate's 29,500 Restricted Transformation Shares (as defined in the
Agreement) to remain outstanding solely for the purpose of permitting such
Restricted Transformation Shares to vest to the same extent and on the same
terms as Restricted Transformation Shares of Company executive officers are
permitted to vest with respect to the achievement of vesting criteria
during 2001. Nothing herein is intended or shall be construed to guarantee
any vesting of Associate's Restricted Transformation Shares or to provide
that Associate's Restricted Transformation Shares are to remain outstanding
for any other purpose. Stock certificates or book-entry registrations with
respect to any of the Associate's Restricted Transformation Shares which do
not vest as provided for in this Section 8 shall be cancelled, and the
Dividend Escrow Account (as defined in the Agreement) shall thereupon be
terminated, and no payment whatsoever shall be due to the Associate in
connection with such cancellation or termination.
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9. Associate represents that she does not have any claim or legal action of
any kind pending against the Company (defined above), including, but not
limited to, any relating to her employment with the Company or termination
thereof, or otherwise involving facts which occurred on or prior to the
date on which she has signed this Agreement.
10. In exchange for the above consideration, Associate releases and forever
discharges the Company from any and all causes of action, claims or demands
up to the date of this Agreement, known or unknown, including, but not
limited to, those relating to her employment with the Company and the
termination thereof; in tort, such as wrongful or retaliatory discharge in
violation of public policy, for emotional distress, defamation, slander,
libel or false imprisonment; in contract, whether express or implied; under
any Company policy, procedure or benefit plan (except vested benefits, if
any, in the Company's 401(k) Savings and Profit Sharing Plan and SERP
Plan); for reinstatement, attorneys fees, back pay or front pay; and under
any federal, state or local law or ordinance, including, but not limited
to, Title VII of the Civil Rights Act, the Civil Rights Acts of 1871 and
1991, the Pregnancy Discrimination Act, the Americans with Disabilities
Act, the Age Discrimination in Employment Act, the Employee Retirement
Income Security Act, the Federal Family and Medical Leave Act, the Fair
Labor Standards Act, the Equal Pay Act, the Workers' Adjustment and
Retraining Notification Act, the New York Human Rights Law, Executive Law
Section 290, et seq. ("HRL"); the New York Retaliatory Action By Employers
Law, Labor Law Section 740, et seq. ("XXXX"); the New York Civil Rights
Law, Section 1, et seq. ("CRL"); the New York Nondiscrimination for Legal
Actions Law, Labor Law Section 201-d, et seq. ("NLAL"); the New York
Wage-Hour Law, Labor Law Section 220, et seq. ("NYWH"); the New York
Workers' Compensation Law, Section 1, et seq. ("NYWC"); the New York Wage
Payment Law, Labor Law Section 190, et seq. ("HRL"); the New York City
Human Rights Law, N.Y.C. Admin. Code Section 8-101, et seq. ("NYCHRL") and
for harassment, discrimination and retaliation of any kind, or any other
cause of action. The foregoing release shall not cover any amounts due
under the Separation Agreement or any rights of indemnification under
applicable law or the Company's charter and bylaws or any rights of
indemnification Associate may be entitled to pursuant to the Company's
directors' and officers' liability insurance.
11. By signing this Agreement, the Company does not admit to any wrongdoing or
violation of any statutory, regulatory or common law obligation owed to
Associate by the Company. Accordingly, this Agreement shall not be
admissible in Court as an admission, but only in an action to enforce it.
12. Associate agrees not to apply for reemployment with the Company, unless
requested to do so by the Company.
13. Associate agrees to immediately turn over any Company records or property
in her possession including, without limitation, ID cards, keys, credit
cards, personal computers, files, software, business equipment and
instruction
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manuals. Notwithstanding the immediately preceding sentence, Associate
shall be entitled to keep the SONY VAIO laptop computer issued to her by
the Company during her employment.
14. Associate agrees to keep the terms of this Agreement confidential (unless
such terms are publicly released by Company), and shall not disclose such
information to any person or entity, including, but not limited to,
current, former or future associates of the Company. This confidentiality
requirement, however, shall not prohibit Associate from disclosure to her
immediate family (spouse, siblings, parents), accountant or attorney, if
any, or the limitations on her activities to any potential employer, or to
tax agencies, as required, provided that they too keep such information
confidential. Associate understands that she is responsible, not only for
her unauthorized disclosure, but also that by anyone to whom she discloses
such information.
Associate agrees that she will not solicit or encourage any former, current
or future associate of the Company to pursue claims against the Company.
15. Associate understands that this Agreement covers only those claims arising
prior to the date it was signed, including those related to her employment
with the Company and/or termination thereof. Associate acknowledges that
the above-referenced consideration is the total payment she will receive
from the Company, that it exceeds that to which she would otherwise be
entitled, and that she is not entitled to any additional payments under the
Company's policies or benefit or severance plans (except vested benefits,
if any, under the Company's 401(k) Savings and Profit Sharing Plan and SERP
Plan).
16. Associate acknowledges that she was given the opportunity to fully consider
this Agreement for a period of up to twenty-one (21) days. Associate has
been advised to consult counsel as part of her review of this Agreement.
Associate understands that Associate has seven (7) days from her execution
of this document to revoke this Agreement. It is further understood that
this Agreement shall not become effective or enforceable nor shall any of
the consideration described in this Agreement be paid or provided by the
Company until both parties have signed it and the seven (7) day revocation
period has expired whichever is later.
17. Associate agrees that if she should violate the provisions of the
Employment Agreement which survive Associate's termination of employment,
or Paragraphs 9, 12, 13, 19(a) or 20 of this Agreement, in addition to any
and all other equitable and legal remedies which may be available to it,
the Company shall be entitled to cancel its portion of the Agreement,
withhold any payment or other benefits provided in this Agreement and/or
shall be entitled to recover the payments already made to Associate in
accordance with the terms of this Agreement, together with any and all
attorney's fees incurred thereby and together with interest
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thereon. Associate acknowledges that the Company's remedies are a
reasonable measure of compensation for breach of this Agreement, and are
not punitive in nature. The Company's rights to recover payments made
hereunder shall survive for a period of two (2) years from the date such
payment is made.
18. If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications
and to this end the provisions of this Agreement are declared to be
severable.
19. (a) Associate shall not with willful intent to damage economically or as to
reputation or vindictively disparage the Company, its subsidiaries or their
respective past or present officers, directors or employees (the "Protected
Group"), provided that the foregoing shall not apply to (i) actions or
statements taken or made by the Associate while employed by the Company in
good faith as fulfilling the Associate's duties with the Company or
otherwise at the request of the Company, (ii) truthful statements made in
compliance with legal process or governmental inquiry, (iii) as the
Associate in good xxxxx xxxxx necessary to rebut any untrue or misleading
public statements made about her or any other member of the Protected
Group; (iv) statements made in good faith by the Associate to rebut untrue
or misleading statements made about her or any other member of the
Protected Group by any member of the Protected Group, and (v) normal
commercial puffery in a competitive business situation. No member of the
Protected Group shall be a third party beneficiary of this Section 19(a).
(b) Company agrees to advise Xxxx Xxxxxxx, Xxxxx Xxxxxxxxx, Xxx Xxxx, Xxxx
Xxxxxxxx, Xxxx Xxxx, Xxx Xxx, Xxxxxx Xxxxxxxx and Xxx Xxxxxx that while
they are employed by Company, not to make any negative statements about
Associate, nor do anything which derogates Associate or which damages
Associate in any business relationship.
20. This Agreement constitutes the complete understanding and entire Agreement
of the parties and it cannot be amended, terminated, discharged or waived,
except by a suitable writing signed by Associate and the Company. The laws
of the State of New York shall govern and control without giving effect to
its choice of law provisions. The parties further agree that the only venue
for any claim a party might make against the other or for an action to
enforce the terms of this Agreement shall be in a court of appropriate
jurisdiction located in the City of New York.
21. The parties agree that should there be a question of interpretation of this
Agreement or a part thereof, there shall be no presumption against the
drafter of this Agreement.
22. Associate fully understands all of the terms and intent of this Agreement
and does hereby execute it voluntarily and with full knowledge of its
significance. Associate represents and acknowledges in executing this
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Agreement that she does not rely and has not relied upon any representation
or statement made by the Company or by any of the Company's agents,
representatives or attorneys, with regard to the subject matter, basis or
effect of this Agreement or otherwise, other than as specifically stated in
this written Agreement.
23. Following Associate's termination of employment with the Company, Associate
agrees to fully cooperate with the Company in connection with current or
future third party claims, which arise from matters in which she was
involved as an executive of the Company, which cooperation shall include,
without limitation, attendance at depositions and court proceedings and
execution of affidavits and other documents in form reasonably satisfactory
to Associate, and at times reasonably convenient to Associate with due
regard to her other commitments and to the Company's legal requirements.
XXXXXX X. XXXXXX
By: /s/Xxxxxx X. Xxxxxx
----------------
Xxxxxx X. Xxxxxx
Date: February 7, 2001
LIZ CLAIBORNE, INC.
By: /s/Xxxx X. Xxxxxxx
---------------
Xxxx X. Xxxxxxx
Date: February 9, 2001
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ANNEX A
OPTIONS VESTING OPTIONS VESTING
AWARD DATE JANUARY 2001 JANUARY 2002 EXERCISE PRICE
January 6, 1998 9,450 0 $41.125
January 4, 1999 7,000 14,000 $32.5625
January 25, 2000 12,500 12,500 $35.8125
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