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EMPLOYMENT AGREEMENT
This Agreement (the "Agreement") effective as of May 26, 2000 is made by
and among Aris Industries, Inc., a New York corporation (the "Company"), Europe
Craft Imports, Inc. and ECI Sportswear, Inc. (the "Subsidiaries"), and Xxxxxxx
Xxxxxxx (the "Executive"). The Company and the Subsidiaries are collectively
referred to in this Agreement as the "Company" unless otherwise required by the
specific context of a particular provision hereof.
R E C I T A L S:
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A. The Executive is currently a consultant to the Company and the
Subsidiaries.
B. The Company desires to continue the services of the Executive as
Executive Vice President and Chief Operating Officer of the Company and the
Subsidiaries.
C. The Executive is willing to serve as Executive Vice President and
Chief Operating Officer of the Company and the Subsidiaries (so long as they are
subsidiaries of the Company) and is willing to accept employment by the Company
on the terms set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, and other good and valuable consideration, the
Company, the Subsidiaries and the Executive hereby agree as follows:
1. Definitions.
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1.1 "Affiliate" means any Person controlling, controlled by or under
common control with the Company.
1.2 "Board" means the Board of Directors of the Company and/or the
Subsidiaries.
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1.3 "Cause" means (a) the Executive is convicted of or pleads guilty
to a felony involving dishonesty as against the Company or the Subsidiaries, (b)
the Executive is convicted of a felony not involving the Company, and after
exhausting all rights of appeal, is obligated to serve ten (10) or more days in
prison or pay a fine of more than Five Hundred Thousand ($500,000) Dollars, or
(c) the Executive, in carrying out the Executive's duties and responsibilities
under this Agreement, is guilty of gross neglect or gross misconduct resulting,
in either case, in material economic harm to the Company and/or the
Subsidiaries, unless such act, or failure to act, was reasonably believed by the
Executive in good faith, using reasonable judgment under the circumstances, to
be in the best interests of the Company and/or the Subsidiaries.
1.4 "Date of Termination" means (a) in the case of a termination for
which a Notice of Termination (as hereinafter defined in Section 6.6) is
required, the date of actual receipt of such Notice of Termination or, if later,
the date specified therein, as the case may be, and (b) in all other cases, the
actual date on which the Executive's employment terminates during the Term of
Employment (as hereinafter defined in Section 3) (it being understood that
nothing contained in this definition of "Date of Termination" shall affect any
of the cure rights provided to the Executive or the Company in this Agreement).
1.5 "Disability" means the Executive's inability to render, for a
period of nine consecutive months, services hereunder.
1.6 "Adjusted EBITDA" means for any fiscal year the sum of (a) the
net income of the Company and its subsidiaries on a consolidated basis for such
fiscal year as determined in accordance with GAAP except as specifically noted
below in this definition, (b)
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taxes in respect of income, (c) interest for money borrowed, (d) depreciation,
(e) amortization and (f) factoring fees, charges and expenses, provided that the
following shall be excluded from Adjusted EBITDA: (A) extraordinary, unusual or
non-recurring expenses including, without limitation, restructuring charges,
severance payments, duplicative lease payments and write-downs of any assets on
the Company's books as of December 31, 1999, (B) gains and losses from financing
transactions and (C) losses from the sale or other disposition of material
assets (other than inventory) outside of the ordinary course of business; and
(D) to the extent that, in connection with or otherwise related to the
performance of a material arrangement with a licensor in the year such license
arrangement is entered into the revenues, if any, associated with such license
are exceeded by the costs and expenses (including general and administrative
expenses related thereto) associated with such license (thereby resulting in a
net reduction in Adjusted EBITDA). It is understood and agreed that there shall
be an appropriate calculation so that the amount of any bonus payable in respect
of any fiscal year pursuant to Section 5.2 shall not reduce the Adjusted EBITDA
for the purpose of calculating the bonus under Section 5.2.
1.7 "Good Reason" means and shall be deemed to exist if (a) without
the Executive's express prior written consent, the Executive is assigned any
duties or responsibilities inconsistent in any material respect with the scope
of the duties or responsibilities associated with the Executive's title or
positions, as set forth and described in Article 4 of this Agreement; (b)
without the Executive's express prior written consent, the Executive suffers, in
any material respect, a reduction in the duties, responsibilities or effective
authority associated with Executive's titles and positions as set forth and
described in Article 4 of this Agreement; (c) without the Executive's express
prior written consent, the Executive is not appointed to and/or
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elected to, or is removed from, the offices or positions provided for in Section
4.1 of this Agreement; (d) the Company fails to substantially perform or
otherwise substantially breaches any material term or provision of this
Agreement; (e) without the Executive's express prior written consent, and except
as provided in Section 5.2 hereof, the Executive's compensation under this
Agreement is decreased, or the Executive's benefits under employee benefit or
health or welfare plans or programs of the Company are in the aggregate
materially decreased; (f) the Company's principal office or the Executive's own
office location is relocated to a location not within 20 miles of Manhattan, or
within Los Angeles County provided however, if Employee's office is relocated to
Los Angeles county, the Company shall reimburse Executive for all expenses
incurred in moving his family and possessions to Los Angeles County; (g) the
Company fails to obtain the full assumption of this Agreement by a successor
entity in accordance with Section 12.2 of this Agreement; (h) the Company fails
to use reasonable efforts to maintain, or cause to be maintained, directors and
officers liability insurance coverage for the Executive as provided in Section
13.10 of this Agreement; (i) the Company purports to terminate the Executive's
employment for Cause and the Company is not entitled to terminate this Agreement
for Cause; (j) there shall occur (1) any liquidation of the Company or the sale
of substantially all of the assets of the Company, or (2) any merger,
consolidation or other business combination of the Company (a "Transaction") or
any combination of any such Transactions, other than a Transaction immediately
after which the stockholders of the Company who were stockholders immediately
prior to the Transaction continue to own beneficially, directly or indirectly,
more than fifty percent (50%) of the then outstanding voting securities of the
Company and the Subsidiaries in which the Company's common stockholders receive
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consideration of at least $2 per share; (k) any Person or group (as such term is
defined in Rule 13d-5 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of related Persons, which is not an Affiliate of the Company as
of the Commencement Date shall beneficially own, directly or indirectly, more
than 50% of the then outstanding voting stock of the Company or the
Subsidiaries; or (l) Xxxxxx Xxxxx ceases to be Chief Executive Officer of the
Company.
1.8 "Person(s)" means any individual or entity of any kind or
nature, including any other person as defined in Section 3(a)(9) of the Exchange
Act, and as used in Sections 13(d) and 14(d) thereof.
2. Employment. Subject to the terms and provisions set forth in this
Agreement, the Company and each Subsidiary hereby employs the Executive during
the Term of Employment as the Executive Vice President and Chief Operating
Officer of the Company and the Subsidiaries, and the Executive hereby accepts
such employment.
3. Term of Employment. The term of employment (the "Term) under this
Agreement shall be deemed to commence as of the date hereof (the "Commencement
Date") and, unless terminated earlier pursuant to the terms hereof, shall
terminate on February 28, 2003 (the "Initial Term of Employment"). The Term
shall automatically renew for successive one-year periods after the Initial Term
unless either party gives notice to the other at least six months, but no longer
than nine months, before the end of the then-applicable Term. Notwithstanding
the foregoing, at any time commencing on or after three months before the end of
the Initial Term and continuing thereafter, Executive, upon 90 days prior
written notice (the "Consulting Notice") may elect to convert his status from
employee to consultant for a period of three years following
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the effective date of such Notice, in which case, (x) Executive shall make
himself available not more than 20 hours per week to consult with the Company's
Chief Executive Officer, and (y) his Base Salary then in effect shall be reduced
by 50% and he shall not be entitled to a bonus for any year after the year in
which the Consulting Notice becomes effective. In the event the Company elects
not to renew the Term, it shall pay to Executive during the three years
following the end of the Term, at regular payroll intervals, 50% of his then
applicable base salary.
4. Positions, Responsibilities and Duties.
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4.1 Positions. During the Term of Employment, the Executive shall be
employed as Chief Operating Officer of the Company and the Subsidiaries (for
such period as they continue to be subsidiaries). In such position, the
Executive shall have the duties, responsibilities and authority normally
associated with the office and position of Chief Operating Officer of a company.
The Executive shall report to the Chief Executive Officer and Board of Directors
of the Company.
4.2 Duties. During the Term of Employment, the Executive shall
devote substantially all of Executive's business time and attention to the
business of the Company and shall perform faithfully and efficiently the duties
and responsibilities contemplated by this Agreement, provided, however,
Executive may continue to engage in such other business in which he is currently
engaged.
5. Compensation and Other Benefits.
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5.1 Base Salary. During the Term of Employment, the Executive shall
receive a base salary of no less than $375,000 per annum ("Base Salary") payable
in equal monthly installments. Such Base Salary shall be reviewed annually for
increase (but not decrease) in the
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sole discretion of the Board. In conducting any such annual review, the Board
shall take into account any change in the Executive's responsibilities,
increases in the compensation of other executives of the Company or the
Subsidiaries or of competitors of either, the performance of the Executive and
other pertinent factors. The increased Base Salary shall then constitute the
"Base Salary" for purposes of this Agreement.
5.2 Annual Bonus. For each Calendar Year during the Term in which
Executive is employed by the Company as of June 30 of such year, the Executive
shall be entitled to receive an annual cash bonus payment (the "Bonus")
determined as follows:
If Adjusted EBITDA is: Amount of Bonus
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Less than $5 million -0-
Between $5 million - 1% of Adjusted EBITDA
$10 million
Over $10 million 1.5% of Adjusted EBITDA
The Annual Bonus shall be paid to the Executive in cash as soon as
practicable after the end of the fiscal year to which it relates, but in any
event no later than one hundred five (105) calendar days after the end of such
fiscal year (and, to the extent there is any disagreement as to the amount
thereof any amount acknowledged as payable by the Company shall be paid by such
date).
5.3 Intentionally Omitted.
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5.4 Incentive, Retirement, and Savings Plans. During the Term of
Employment, the Executive shall be entitled to participate in all incentive,
pension, retirement, savings and other employee benefit plans and programs
maintained by the Company and/or the Subsidiaries for the benefit of senior
executives.
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5.5 Welfare Benefit Plans. During the Term of Employment, the
Executive, the Executive's spouse and their eligible dependents, if any, shall
be entitled to participate in and be covered under all the welfare benefit plans
or programs maintained by the Company and/or the Subsidiaries, including,
without limitation, all term life insurance, long term disability insurance,
medical, hospitalization, dental, disability, accidental death and dismemberment
and travel accident insurance plans and programs.
5.6 Intentionally Omitted.
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5.7 Expense Reimbursement. In addition to the expense reimbursement
set forth on Schedule 5.8, during the Term of Employment, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in performing the Executive's duties and responsibilities
hereunder in accordance with the policies and procedures of the Company. At the
end of each fiscal year, the Executive and the Company shall in good faith
reconcile any differences and disputes with respect to timing, right to
reimbursement, reasonableness or documentation of any items of expense
reimbursement, it being agreed that no dispute respecting any of the foregoing
shall constitute a basis for the Executive or the Company (including the
Subsidiaries) terminating or attempting to terminate this Agreement.
5.8 Vacation and Fringe Benefits. During the Term of Employment,
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the Executive shall be entitled to such paid vacation, fringe benefits and
perquisites as set forth in Schedule 5.8.
6. Termination.
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6.1 Termination Due to Death or Disability. The Company or the
Executive may terminate the Executive's employment hereunder due to his death or
Disability. In the event
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the Executive's employment is terminated due to death Disability, the
Executive's estate or Executive's legal representative, as the case may be,
shall be entitled to:
(a) (i) in the case of death or disability, Base Salary continuation
at the rate in effect (as provided for by Section 5.1 of this Agreement)
on the Date of Termination for a period of six (6) months after the Date
of Termination.
(b) any Base Salary accrued or any Annual Bonus earned but not yet
paid;
(c) a pro rata Annual Bonus for the calendar year in which death or
Disability occurs(determined and payable in accordance with Section 5.2 of
this Agreement);
(d) any deferred compensation not yet paid to the Executive
(including, without limitation, interest or other credits on such deferred
amounts) and any accrued vacation pay;
(e) reimbursement pursuant to Section 5.7 hereof or any other
provision of this Agreement for expenses incurred but not yet paid prior
to such death or Disability;
(f) in the case of death, any other compensation and benefits as
may be provided in accordance with the terms and provision of any
applicable plans and programs of the Company and/or the Subsidiaries; and
(g) in the case of Disability, (i) continuation of the Executive's
health and welfare benefits (as described in section 5.5 of this
Agreement) at the level in effect (as provided for by Section 5.5) on the
Date of Termination through the end of the three-year period following the
termination of the Executive's employment due to Disability (or the
Company shall provide the economic equivalent thereof), and (ii) any other
compensation
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and benefits as may be provided in accordance with the terms and
provisions of any applicable plans and programs of the Company.
With respect to the deferred compensation arrangements referred to in
Sections 6.1(d), 6.2(c) and 6.3(d), to the extent that such deferred
compensation arrangements provide by their terms for any deferral of payments in
the event of death or Disability; termination with Cause or termination without
Cause or for Good Reason, such payments shall be deferred in accordance with
such arrangements to the extent required by the type of termination of this
Agreement. With respect to the other benefits referred to in Sections 6.1(g),
6.2(e) and 6.3(g), to the extent that such other benefit arrangements provide by
their terms for any deferral of payments in the event of death or Disability,
termination with Cause or termination without Cause or for Good Reason, such
payments shall be deferred in accordance with such arrangements to the extent
required by the type of termination of this Agreement.
6.2 Termination by the Company for Cause. The Company may terminate
the Executive's employment hereunder for Cause as provided in this Section 6.2;
provided that no act or omission referred to in Section 1.3(b) hereof occurring
prior to the Commencement Date shall constitute Cause. If the Company terminates
the Executive's employment hereunder for Cause, the Executive shall be entitled
to:
(a) the Executive's Base Salary at the rate in effect (as provided
for by Section 5.1 of this Agreement) at the time of such termination
through the Date of Termination;
(b) any Annual Bonus for the prior fiscal year not yet paid together
with a pro-rata portion of the Annual Bonus for the calendar year in which
termination occurs through the Date of Termination;
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(c) any deferred compensation (including, without limitation,
interest or other credit on such deferred amounts) and any accrued
vacation pay;
(d) reimbursement pursuant to Section 5.7 hereof or any other
provision of this Agreement for expenses incurred, but not yet paid prior
to such termination of employment; and
(e) any other compensation and benefits as may be provided in
accordance with the terms and provisions of any applicable plans and
programs of the Company and/or the Subsidiaries.
In any case described in this Section 6.2, the Executive shall be
given written notice, authorized (with Executive abstaining) by a vote of at
least two thirds (2/3) of the members of the entire Board (excluding Executive),
that the Company intends to terminate the Executive's employment for Cause. Such
written notice, given in accordance with Section 6.6 of this Agreement, shall
specify the particular act or acts, or failure to act, which is or are the basis
for the decision to so terminate the Executive's employment for Cause. The
Executive shall be given the opportunity within ten (10) calendar days of the
receipt of such notice to meet with the Board to defend such act or acts, or
failure to act, and the Executive shall be given twenty (20) business days after
such meeting to correct such act, acts or failure(s) to act, provided that the
Executive shall not have the right to cure the acts described in Section 1.3(a)
hereof. Upon failure of the Executive, within such latter twenty (20) business
day period, to correct such act, acts or failure(s) to act, the Executive's
employment by the Company shall automatically be terminated under this Section
6.2 for Cause as of the date determined in Section 1.4 of this Agreement.
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6.3 Termination Without Cause or Termination with Good Reason. The
Company may terminate the Executive's employment hereunder without Cause and the
Executive may terminate the Executive's employment hereunder for Good Reason. If
the Company terminates the Executive's employment hereunder without Cause, other
than due to death or Disability, or if the Executive terminates Executive's
employment for Good Reason, the Executive shall be entitled to the following:
(a) A lump sum payment in an amount equal to Executive's highest
annual Base Salary (including non-accountable expense allowance) during
the Term of Employment multiplied by 2.99 (two hundred and ninety nine
percent).
(b) Subject to the provisions of Section 6.3(a), a lump sum payment
in an amount equal to Executive's average annual bonus paid or payable to
the Executive with respect to the then immediately preceding three (3)
fiscal years (determined in accordance with Section 6.9 hereof) multiplied
by 2.99 (299%). Notwithstanding the previous sentence, if the payments
pursuant to Sections 6.3(a), 6.3(b) and 6.3(c) together with any other
payments considered to be parachute payments within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended from time to time
(the "Internal Revenue Code") or any successor provision shall cause the
Executive to incur an excise tax pursuant to Section 4999 of the Internal
Revenue Code (or any successor provision) or any similar tax, the payments
payable pursuant to Section 6.3(a), this Section 6.3(b) and Section 6.3(c)
shall be reduced to an amount which would not cause such excise or similar
tax to be incurred.
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(c) any Base Salary accrued or Annual Bonus earned but not yet paid
as of the actual termination of this Agreement, and a pro rata Annual
Bonus for the calendar year in which such termination occurs.
(d) any deferred compensation (including, without limitation,
interest or other credits on the deferred amounts) and any accrued
vacation pay;
(e) reimbursement pursuant to Section 5.7 hereof or any other
provision of this Agreement for expenses incurred, but not paid prior to
such termination of employment;
(f) continuation of the pre-existing benefits of the Executive,
including, without limitation, health, welfare, life and any long-term
disability insurance heretofore provided or otherwise generally provided
to senior executives of the Company (including the Subsidiaries), all at
the level in effect (as provided for by Section 5.5 of this Agreement) on
the Date of Termination through the end of the three (3) year period
following such termination of employment (or the Company shall provide the
economic equivalent thereof); and
(g) any other compensation and benefits as may be provided in
accordance with the terms and provisions of any applicable plans or
programs of the Company and/or the Subsidiaries.
If the Executive seeks to terminate the Executive's employment hereunder
for Good Reason, the Company shall be given written notice that the Executive
intends to terminate the Executive's employment for Good Reason. Such written
notice, given in accordance with Section 6.6 of this Agreement, shall specify
the particular act or acts, or failure(s) to act, which is
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or are the basis for the Executive's decision to so terminate the Executive's
employment for Good Reason. The Company shall be given the opportunity within
ten (10) calendar days of the receipt of such notice to meet with the Executive
to defend such act or acts, or failure(s) to act, and the Company shall be given
twenty (20) business days after such meeting to correct such act, acts or
failure(s) to act provided that the Company shall not have the right to correct
the acts or failure(s) to act specified in clauses (c) and (i) of the definition
of Good Reason. Upon failure of the Company, within such latter twenty (20)
business day period, to correct such act, acts or failure(s) to act, the
Executive's employment by the Company shall automatically be terminated under
this Section 6.3 for Good Reason as of the date of actual termination provided
that the date of actual termination shall be ten (10) calendar days after
receipt of the Executive's notice if the Company does not have the right to
correct such act(s) or failure(s) to act.
6.4 Intentionally omitted.
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6.5 No Mitigation; No Offset. In the event of any termination of
employment under this Section 6, the Executive shall be under no obligation to
seek other employment and there shall be no offset against any amounts paid or
payable the Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that the Executive may obtain. Any
amounts due under this Section 6 are in the nature of severance payments, or
liquidated damages, or both, and are not in the nature of a penalty.
6.6 Notice of Termination. Any termination of the Executive by the
Company or by the Executive for Good Reason shall be communicated by a notice of
termination to the other party hereto given in accordance with Section 15.3 of
this Agreement (the "Notice of Termination"). Such notice shall (a) indicate the
specific termination provision in this
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Agreement relied upon, (b) set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and (c) if the termination date is
other than the date of receipt of such notice, specify the date on which the
Executive's employment is to be terminated (which date shall not be earlier than
the date on which such notice is given).
6.7 Payment. Except as otherwise provided in this Agreement, any
payments to which the Executive shall be entitled under this Section 6,
including, without limitation, any economic equivalent of any benefit, shall be
made as promptly as possible following the Date of Termination. If the amount of
any payment due to the Executive cannot be finally determined within thirty (30)
days after the Date of Termination (by way of example only, pro rata bonuses
determined pursuant to Section 6.10 hereof), such amount shall be estimated on a
good faith basis by the Company and the estimated amount shall be paid no later
than thirty (30) days after such Date of Termination. As soon as practicable
thereafter, the final determination of the amount due shall be made and any
adjustment requiring a payment to or from the Executive shall be made as
promptly as practicable.
6.8 Disclosure of Termination. Subject to the requirements of any
Exchange on which securities of the Company may be listed or the securities
laws, and except for terminations for Cause or the death or Disability of the
Executive, any public disclosure of the termination of this Agreement by the
Company shall be subject to prior review and approval by the Executive, which
review and approval shall not be unreasonably withheld or delayed.
6.9 Pro Rata Calculations. For the purposes of this Article 6
(except Section 6.2(b)), all calculations of the Annual Bonus on a pro rata
basis shall mean that the Annual
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Bonus shall be based on the bonus that would have been payable for the entire
calendar year multiplied by a fraction, the numerator of which is the number of
days from January 1 in such year through the date of the termination of this
Agreement and the denominator of which is 365.
7. Intentionally Omitted.
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8. Non-exclusivity of Rights. Except as provided in Section 5.4 hereof,
nothing in this Agreement or any other provision of this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided or maintained by the Company,
the Subsidiaries or any other Affiliate and for which the Executive may qualify,
nor shall anything herein limit or otherwise prejudice such rights as the
Executive may have under any other existing or future agreements with the
Company, the Subsidiaries or any Affiliate, including, without limitation, any
change of control agreements or any stock option or restricted stock agreements.
Except as otherwise expressly provided for in this Agreement, amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plans or programs of the Company, the Subsidiaries or any other Affiliate at
or subsequent to the Date of Termination shall be payable in accordance with
such plans or programs.
9. Full Performance. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others.
10. Fees and Expenses. In the event that a claim for payment or benefits
under this Agreement is disputed, the Company shall advance and pay all
reasonable accounting and legal
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fees and expenses of the Executive, at the regular hourly rate charged by the
accountants and attorneys of the Executive in connection with any such dispute
(whether such dispute is litigated or arbitrated including, without limitation,
in connection with claims that are settled) incurred by the Executive in
pursuing or defending such claim. The Executive shall not have an obligation to
repay any such advances to the Company except to the extent that a court of
competent jurisdiction issues a final, nonappealable judgment ordering the
Executive to reimburse the Company for a portion (or, if so ordered, all) of
legal fees and expenses previously advanced by the Company, based upon such
court's determination of what is reasonable under all applicable facts and
circumstances including which party prevailed on each of the issues disputed.
The Company shall in addition pay or reimburse the Executive for all reasonable
legal fees and expenses incurred by the Executive in connection with the
preparation and negotiation of this Agreement and the matters related thereto.
11. Confidential Information. The Executive shall not, during the Term of
Employment and thereafter, without the prior express written consent of the
Company, disclose any confidential information, knowledge or data relating to
the Company, which (a) was obtained by the Executive in the course of the
Executive's employment with the Company, and (b) which is not information,
knowledge or data otherwise in the public domain (other than by reason of a
breach of this provision by the Executive), unless required to do so by a court
of law or equity or by a governmental agency or other authority.
12. Successors.
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12.1 The Executive. This Agreement is personal to the Executive and,
without the prior express written consent of the Company, shall not be
assignable by the Executive,
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except that the Executive's rights to receive any compensation or benefits under
this Agreement may be transferred or disposed of pursuant to testamentary
disposition, intestate succession or a qualified domestic relations order or in
connection with a Disability. This Agreement shall inure to the benefit of and
be enforceable by the Executive's estate, heirs, beneficiaries and/or legal
representatives.
12.2 The Company. This Agreement shall inure to the benefit of and
be binding upon the Company and its successors and assigns. The Company shall
require any successor to all or substantially all of the business and/or assets
of the Company or the Subsidiaries, whether direct or indirect, by purchase,
merger, consolidation, acquisition of stock, or otherwise, by an agreement in
form and substance satisfactory to the Executive, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent as the
Company would be required to perform had no such succession taken place.
13. Indemnification.
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13.1 General. The Company agrees that if the Executive is made a
party or is threatened to be made a party to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "Proceeding"), by
reason of the fact that Executive is or was a director or officer of the
Company, the Subsidiaries and/or any other Affiliate or is or was serving at the
request of the Company, the Subsidiaries and/or any other Affiliate as a
director, officer, member, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including, without
limitation, service with respect to employee benefit plans, whether or not the
basis of such Proceeding is alleged action in an official capacity as a
director, officer, member, employee or agent while serving as a director,
officer, member, employee or
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agent, Executive shall be indemnified and held harmless by the Company to the
fullest extent authorized by New York law, as the same exists or may hereafter
be amended, against all Expenses (as hereinafter defined in Section 13.2)
incurred or suffered by the Executive in connection therewith, and such
indemnification shall continue as to the Executive even if the Executive has
ceased to be an officer, director or agent, or is no longer employed by the
Company and shall inure to the benefit of Executive's heirs, executors and
administrators.
13.2 Expenses. As used in this Article, the term "Expenses" shall
include, without limitation, damages, losses, judgments, liabilities, fines,
penalties, excise taxes, settlements and costs, reasonable attorneys' fees,
reasonable accountants' fees, and disbursements and costs of attachment or
similar bonds, investigations, and any reasonable expenses of establishing a
right to indemnification under this Agreement.
13.3 Enforcement. If a claim or request under this Article is not
paid by the Company fifteen (15) days after a written claim or request has been
received by the Company, the Executive may at any time thereafter bring suit
against the Company to recover the unpaid amount of the claim or request and if
successful in whole or in part, the Executive shall be entitled to be paid also
the expenses of prosecuting such suit. The burden of proving that the Executive
is not entitled to indemnification for any reason shall be upon the Company.
13.4 Subrogation. In the event of payment under this Article, the
Company shall be subrogated to the extent of such payment to all the rights of
recovery of the Executive.
13.5 Partial Indemnification. If the Executive is entitled under any
provision of this Article to indemnification by the Company for some or a
portion of any Expenses, but not,
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however, for the total amount thereof, the Company shall nevertheless indemnify
the Executive for the portion of such Expenses to which the Executive is
entitled.
13.6 Advances of Expenses. Expenses incurred by the Executive in
connection with any Proceeding shall be paid by the Company in advance upon
request of the Executive that the Company pay such Expenses, provided that prior
to such advance the Executive shall provide the Company with a written
undertaking to repay such advances to the Company if it shall ultimately be
determined that he is not entitled to be indemnified as authorized under the New
York Business General Corporation Law.
13.7 Notice of Claim. The Executive shall give to the Company notice
of any claim made against the Executive for which indemnity will or could be
sought under this Article. In addition, the Executive shall give the Company
such information and cooperation as it may reasonably require and as shall be
within the Executive's power and at such times and places as are convenient for
the Executive.
13.8 Defense of Claim. With respect to any Proceeding as to which
the Executive notifies the Company of the commencement thereof:
13.8.1 The Company will be entitled to participate therein at
its own expense; and
13.8.2 Except as otherwise provided below, to the extent that
it may wish, the Company jointly with any other indemnifying party similarly
notified will be entitled to assume the defense of the Executive, with counsel
satisfactory to the Executive. The Executive also shall have the right to employ
the Executive's own counsel in such action, suit or Proceeding and the
reasonable fees and expenses of such counsel shall be at the expense of the
Company.
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The Company shall not be entitled to assume the defense of any action, suit or
Proceeding brought by or on behalf of the Company or the Subsidiaries or as to
which the Executive shall have concluded that there may be a conflict of
interest between the Company or the Subsidiaries and the Executive in the
conduct of the defense of such action.
13.8.3 The Company shall not be liable to indemnify the
Executive under this Agreement for any amounts paid in settlement of any action
or claim effected without its written consent. The Company shall not settle any
action or claim in any manner which would impose any penalty or limitation on
the Executive without Executive's written consent. Neither the Company nor the
Executive will unreasonably withhold or delay their consent to any proposed
settlement.
13.9 Non-exclusivity. The right to indemnification and the payment
of expenses incurred in defending a Proceeding in advance of its final
disposition conferred in this Section 13 shall not be exclusive of any other
right which the Executive may have or hereafter may acquire under any statute,
provision of the certificate of incorporation or by-laws of the Company or the
Subsidiaries, agreement, vote of stockholders or disinterested directors or
otherwise.
14. Miscellaneous.
-------------
14.1 Applicable Law. Except as may be otherwise provided herein,
this Agreement shall be governed by and construed in accordance with the laws of
the State of New York, applied without reference to principles of conflict of
laws.
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14.2 Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
14.3 Notices. All notices and other communications hereunder shall
be in writing and shall be given by hand-delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: Xxxxxxx Xxxxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and to: Xxxxxxx Xxxxxxx
Xxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
If to the Company: Aris Industries, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chairman
with a copy to: Xxxxxx X. Xxxxxx
Xxxxxxx Xxxxxx & Xxxxx LLP
000 Xxxxxxx Xxx., 00xx Xxxxx
Xxx Xxxx, XX 00000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
15.4 Withholding. The Company may withhold from any amounts payable
under this Agreement such federal, state and local income, unemployment, social
security and
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similar employment related taxes and similar employment related withholdings as
shall be required to be withheld pursuant to any applicable law or regulation.
15.5 Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, and any such provision which is not valid
or enforceable in whole shall be enforced to the maximum extent permitted by
law.
15.6 Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
15.7 Entire Agreement. This Agreement contains the entire agreement
among the parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the parties with respect thereto.
15.8 Representation. Each party to this Agreement represents and
warrants that it is fully authorized and empowered to enter into this Agreement
and that the performance of its obligations under this Agreement will not
violate any agreement between it and any other person, firm or organization or
any applicable laws or regulations.
15.9 Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement or the
Executive's employment hereunder to the extent necessary to the intended
preservation of such rights and obligations.
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15.10 Joint and Several Obligations. Anything to the contrary
notwithstanding in this Agreement, all of the monetary and non-monetary
obligations of the Company in this Agreement shall be and are the joint and
several obligations of the Company and the Subsidiaries.
15.11 Joint Efforts/Counterparts. Preparation of this Agreement
shall be deemed to be joint effort of the parties hereto and shall not be
construed more severely against any party. This Agreement may be signed in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
ARIS INDUSTRIES, INC.
By /s/ XXXXXX X. XXXXX
-----------------------------
Xxxxxx X. Xxxxx
Chief Executive Officer
ECI SPORTSWEAR, INC.
By /s/ XXXXXX X. XXXXX
-----------------------------
Xxxxxx X. Xxxxx
Chief Executive Officer
EUROPE CRAFT IMPORTS, INC.
By /s/ XXXXXX X. XXXXX
-----------------------------
Xxxxxx X. Xxxxx
Chief Executive Officer
/s/ XXXXXXX XXXXXXX
---------------------------
Xxxxxxx Xxxxxxx
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SCHEDULE 5.8
PERQUISITES AND FRINGE BENEFITS
o Reimbursement of $25,000 of a non-accountable expense
allowance
o Four (4) weeks of paid vacation for each calendar year, to be
taken cumulatively
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