EMPLOYMENT CONTRACT
EMPLOYMENT CONTRACT dated June 27, 1994 among WG APPAREL, INC., a Delaware
corporation ("WG"), whose business address is 00 Xxxxx Xxxxx, Xxxxxxx, Xxx
Xxxxxx 00000, and XXXX XXXXXXX, whose address is 00 Xxxxx Xxxxx, Xxxxxxx, Xxx
Xxxxxx, 00000 ("Employee").
WG desires to engage Employee to perform services as an executive officer
of WG and Employee desires to perform such services, on the terms and conditions
hereinafter set forth.
Accordingly, WG and Employee agree as follows:
1. TERM.
WG agrees to employ Employee to perform services as an executive
officer for a period which will commence with the closing of the transaction
between WG and Xxxxxxx & Xxxxx, Inc. or such shorter period as may be provided
herein and which shall continue indefinitely, subject to termination by WG upon
not less than one year written notice given by WG (the "Employment Period").
2. NATURE OF SERVICES.
During the Employment Period, Employee shall be employed in an
executive capacity in the business of WG. Employee shall serve as Chairman of
the Board and Chief Executive Officer of WG upon commencement of the Employment
Period and thereafter for so long as requested by WG's Board of Directors. In
the performance of his duties, Employee shall be subject to the
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policy direction of the Board of Directors of the Company and the chief
executive officer of WG or his designate.
3. AGREEMENT TO SERVE.
Employee agrees to his employment as described in Section 2 and agrees
to devote all his business time and efforts (except immaterial time and effort
devoted to personal business affairs and investments) to the performance of his
duties under this Employment Contract. Employee agrees that in the course of
his employment, he will faithfully observe and carry out all of the duties and
responsibilities customarily owed by an employee to his employer.
4. COMPENSATION.
Employee's salary during the Employment Period shall be fixed from
time to time by the Compensation Committee of the Board of Directors of WG, Inc.
(the "Committee") but shall not be less than $200,000 per annum, payable in
equal installments no less frequently than monthly.
5. INCENTIVE COMPENSATION.
Employee shall be entitled to receive bonus or bonuses during the
Employment Period as may be provided by the Committee pursuant to WG's Incentive
Compensation Plan for Key Employees ("WG Plan"), or any successor, replacement
or additional incentive plan, provided, however, that with respect to each
annual amount available for distribution, if any, pursuant to the WG Plan,
Employee shall receive no less than eight percent (8%). Awards from the plan
will be paid no later than March 31 following the end of the year.
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6. EXPENSES; VACATIONS; FRINGE BENEFITS.
During the Employment Period, Employee shall be entitled to: (i)
reimbursement for reasonable travel, entertainment and other expenses
necessarily incurred in the performance of his duties hereunder upon submission
and approval of written statements in accordance with WG's standard policies as
in effect from time to time; (ii) reasonable vacations in accordance with WG's
then current regular procedures governing executives; (iii) participation in
such group insurance, retirement and other group benefit programs as from time
to time may be extended generally to WG executives; (iv) participation in WG's
Supplemental Death and Retirement Plan; (v) medical and hospital insurance
benefits, which shall be at least equal to those benefits in effect on the date
hereof; (vi) use of an automobile comparable to that presently being used by
executives in the business of the Company; (vii) participation in all coverage
under all compensation, pension, welfare and fringe benefit plans, programs and
policies of WG applicable to senior executives of WG; and (viii) such additional
compensation, in the form of incentive compensation or otherwise, and such
participation in WG stock option, stock award, stock purchase or other stock
plans, as the Committee may from time to time provide.
7. NON-COMPETITION.
Employee agrees that he will not, directly or indirectly (individually
or for, with or through any other person, firm or corporation, by equity
ownership or otherwise),
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(i) compete with WG or any subsidiary or other affiliate or any successors or
assigns of their businesses during the Employment Period with respect to any
business carried on by WG, or any such subsidiary or other affiliate, successor
or assign, or (ii) for a period of three years after the end of the Employment
Period, compete with WG or any subsidiary or other affiliate or any of their
successors or assigns of the businesses conducted by WG and its subsidiaries at
the date hereof, with respect to such business, either (x) in the United States
or (y) in any area outside the United States where such businesses are now
conducted.
(A) If, however, WG terminates the Employment Period or wrongfully
terminates the Employment Period, the foregoing provisions of this Section 7
shall cease to apply from and after such wrongful termination.
(B) Notwithstanding the foregoing, Employee shall be permitted to own not
in excess of one percent of any class of securities of any public company which,
at the time of Employee's acquisition of the securities, is not engaged in
competition with WG or any subsidiary or other affiliate or any such successor
or assign notwithstanding the fact that such company thereafter (without
assistance from Employee) becomes engaged in such competition, provided Employee
is not part of any controlling group and is solely a passive investor.
8. PATENTS; INVENTIONS.
All of Employee's interest in patents, patent applications,
inventions, technological innovations, copyrights,
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developments and processes now or hereafter during the Employment Period owned
or developed by Employee relating to the business of WG, or any subsidiary or
other affiliate shall belong to WG, and without further compensation, but at
WG's expense, forthwith upon request of WG, Employee shall execute any and all
such assignments and other documents and take any and all such other action as
WG may reasonably request in order to vest in WG all Employee's right, title and
interest in and to such patents, patent applications, inventions, technological
innovations, copyrights, developments or processes, free and clear of liens,
charges and encumbrances.
9. CONFIDENTIAL INFORMATION.
All confidential information which Employee may now have or may obtain
during the Employment Period relating to the business of WG or any subsidiary or
other affiliate shall not be disclosed to any other persons either during or
after the termination of the Employment Period without the prior written
permission of WG, and Employee shall return all tangible evidence of such
confidential information to WG prior to or at the termination of the Employment
Period. Such information shall not include any information otherwise publicly
known.
10. TERMINATION
Notwithstanding anything herein contained:
(A) If Employee shall, during the Employment Period, die or become
physically or mentally incapacitated or disabled for a period of six (6)
consecutive months, then WG shall have the right to give immediate notice of
termination of Employee's services hereunder; and, if, during the Employment
Period, Employee shall materially breach any of the terms hereof and WG shall
have the right to give notice of termination of Employee's
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services hereunder as of a date (not earlier than thirty [30] days from such
notice) to be specified in such notice; provided, however, that Employee shall
have the right during such 30-day period to correct such breach (if capable of
being corrected) or pay compensation deemed reasonable by WG which does not
exceed WG's reasonable estimate of its aggregate loss, damage, deficiency or
expense attributable to such breach (if not capable of being corrected) and
thereby avoid termination.
(B) In the event of termination pursuant to Section 10(a): (i)
Employee (or his estate) shall be entitled to receive his salary at the rate
provided in Section 4 to the end of the calendar month in which termination
occurs; and (ii) if the effective date of such termination is other than the
last day of a year, Employee (or his estate) shall be entitled to incentive
compensation for portions of the year prior to termination which is in the same
ratio to the amount of incentive compensation that would have been payable for
the full year as the ratio of the portions of the year prior to termination to
the full year (such incentive compensation to be determined and paid at the time
provided for in Section 4 for the full year).
(C) If any legal action or other proceeding is brought for the
enforcement of this Employment Contract or because of a dispute regarding an
alleged breach, default or misrepresentation in connection herewith, the
prevailing party in such action or
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other proceeding shall be entitled to recover reasonable attorneys' fees and
other litigation costs (including cost of appeal) and all reasonable related
costs and expenses thereby incurred, in addition to any other relief to which
such prevailing party may be entitled.
11. ENTIRE AGREEMENT; SEVERABILITY.
This Employment Contract sets forth the entire understanding of the
parties with respect to the subject matter herein and may be modified only by a
written instrument duly executed by each party. The invalidity or
unenforceability of any provision of this Employment Contract shall not affect
the validity or enforceability of any other provision.
12. NOTICES.
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by registered mail, return
receipt requested, or delivered against receipt to the party to which it is to
be given at the address of such party first above set forth or to such other
address as the party shall have furnished in writing in accordance with the
provisions of Section 12. Any notice or other communication mailed by
registered mail shall be deemed given at the time of mailing or transmission
thereof.
13. ASSIGNMENT.
In the event of a future disposition of (or including) the properties
and business of WG, substantially as an entirety, by merger, consolidation, sale
of stock or assets or otherwise, then WG may elect to assign this Employment
Contract and all of
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its rights and obligations hereunder to the acquiring or surviving corporation,
provided that such corporation shall assume in writing all of the obligations of
WG hereunder and provided further that WG shall remain liable for the
performance of its obligations hereunder in the event of unjustified failure of
the acquiring corporation to perform it s obligation. Employee's rights under
this Employment Contract shall not be transferrable by assignment or otherwise,
shall not be subject to commutation or encumbrance and shall not be subject to
the claims of Employee's creditors.
14. BINDING EFFECT; INUREMENT
This Employment Contract shall be binding upon and inure to the
benefit of WG and its successors and those who are its assigns under Section 13.
15. GOVERNING LAW
This Employment Contract shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflict of laws.
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IN WITNESS WHEREOF, the parties have duly executed this Employment Contract
as of the date first above written.
WG APPAREL, INC.
BY: /s/ XXXXXXX XXXXXX
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XXXXXXX XXXXXX, PRESIDENT
/s/ XXXX X. XXXXXXX
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XXXX X. XXXXXXX
