CONSULTING AND SEPARATION AGREEMENT
This Consulting and Separation Agreement and Mutual General
Release of all Claims (this "Agreement") is entered into on May 5, 2000 by and
between Xxxxx X. Xxxxxxx (the "Executive") and Paragon Trade Brands, inc.,
including its subsidiaries (the "Company").
In Consideration of the promises set forth in this Agreement,
the Executive and the Company hereby agree as follows.
I. ENTIRE AGREEMENT.
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This Agreement is the entire agreement between the Executive
and the Company with respect to the subject matter hereof
which includes without limitation any rights which may arise
from the separation of the Executive from the Company and
contains all of the agreements, whether written, oral, express
or implied, between the Executive and the Company and
supersedes any other agreement, whether written or oral,
express or implied, between the Executive and the Company.
Except as set forth herein, all prior agreements and alleged
agreements, whether written, oral, express or implied ,between
the Executive and the Company including without limitation the
Employment Agreement between the Executive and the Company
dated August 5, 1997 and the Schedules attached thereto (the
"Employment Agreement") are hereby terminated and extinguished
effective as of the Separation Date. Other than this Agreement
there are no other agreements of any nature whatsoever between
the Executive and the Company which survive this Agreement.
This Agreement cannot be modified or amended except in a
writing signed and agreed to by the Executive and the Company.
II. SEPARATION.
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As of June 30, 2000 or such earlier time as may be determined
by the Company's Board of Directors (the "Board") in its sole
discretion (the "Separation Date"), the Executive hereby
resigns from any and all appointments as an officer, employee
or director he holds with the Company (including as the Chief
Executive Officer of the Company) and any appointments as an
officer, employee or director of any of its subsidiaries or
other affiliates, and hereby agrees that his employment with
the Company is terminated as of the Separation Date. Except as
expressly set forth in this Agreement, the Executive and the
Company shall have no obligations to each other of any nature
whatsoever after the Separation Date. After the Separation
Date, the Executive shall have no authority to act on behalf
of the Company, and shall not hold himself out as having such
authority. The Executive will be paid as of the Separation
Date, a lump sum cash payment equal to any accrued wage
benefits earned prior to the
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Separation Date, including but not limited to any unused
accrued vacation and personal time.
III. CONSULTING ARRANGEMENT.
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In accordance with the understanding between the parties, the
Company shall retain the Executive as a consultant for a
period commencing on the Separation Date and ending on the
first business day following the six-month anniversary of the
Separation date (the "Termination Date"); provided that the
parties may agree in writing to extend the period of this
consulting arrangement (the "Consulting Arrangement") may be
extended, by mutual agreement of the parties, for any period
of time following the Termination Date, and may be terminated
by the Company prior to the Termination Date for "cause." The
Executive shall have such reasonable duties as may be assigned
by the Board from time to time, including but not limited to,
facilitating the transition of Xxxx Xxxxxxx into the position
of Chief Executive Officer of the Company, and assisting with
employees, customers, vendors and joint venture partners. In
respect of his availability to provide consulting services and
for any such services rendered, the Executive shall be paid,
on January 1, 2001, a lump sum in an amount equal to the
excess if any of (i) $500,000 (the "Consulting Fee"), over
(ii) the total amount of the Fee Advances (as defined below)
previously paid to the Executive. The Executive shall be
reimbursed for any reasonable expenses incurred in the
performance of his duties hereunder in accordance with Company
policy. Executive shall receive monthly advance payments ("Fee
Advances") of the Consulting Fee in an amount equal to the
product of (i) the number of days consulting services were
actually rendered in the preceding month, multiplied by (ii)
$5,000. Notwithstanding the foregoing, in the event the
consulting Arrangement is terminated by the Company for cause,
the Executive shall not be entitled to payment of the
Consulting Fee and shall only receive payment for and Fee
Advances accrued through the date of such termination. Any
amounts received by the Executive under the Consulting
Arrangement shall not be reduced or offset by any payments
received by the Executive from other employment prior to the
Termination date. If the Consulting Arrangement is terminated
by the Company without Cause prior to the Executive's receipt
of the Consulting Fee, the Company shall pay to the Executive
on January 1, 2001, a sum representing the excess of (i) the
Consulting Fee over (ii) the total amount of Fee Advances paid
to the Executive. For the purposes of this Agreement, "Cause"
shall mean (I) the Executive engaging in acts of dishonesty or
fraud in connection with his services under the Consulting
Arrangement, or (ii) the breach of a term of this Agreement;
provided, however, that Executive's unavailability to render
services at a given time shall not constitute "Cause."
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IV. ENTITLEMENTS.
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A. The Executive shall receive the following payments:
(i) a single lump sum payment of $1,000,000, representing
severance payable in accordance with Section 4(C)
below;
(ii) a deferred compensation award of $100,001.20 payable
on the Separation Date; and
(iii) an additional deferred compensation payment of
$216,048 as reflected in the Company's 1999 proxy
payable on the Separation Date.
B. The Executive (and the Executive's dependents) shall
receive coverage under the Company's health and employee
benefit plans in effect as of the Separation Date, to the
extent permitted by such plans (in the event such continuation
of coverage is not permitted under such employee benefit plan
such coverage shall be secured through "COBRA" continuation
coverage which shall be provided at the Company's expense), at
the Company's expense for a period of two (2) years from the
Separation date (provided that substantially the same or
equivalent benefits are not available to the Executive by
reason of employment obtained following the Separation Date).
C. The payment described in Section 4(A)(i) above will
be made promptly following the expiration of the seven-day
revocation period commencing on the Separation Date, as
described in Section 7 of this Agreement. The Company shall
withhold from any amounts paid under this Agreement,
or otherwise, the amount of any federal, state or local taxes
then required to be withheld.
IV. DOCUMENTS, CONFIDENTIALITY AND NON DISPARAGEMENT.
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A. RETURN OF DOCUMENTS AND PROPERTY. Promptly after the
Separation date, the Executive agrees to return to the
Company all originals and copies of papers, notes, and
documents (in any medium, including computer disks),
whether Company property or not, prepared, received or
obtained by the Executive or his counsel during the
course of the Executive's employment with the Company
and related to the Company or its business but not
including the Executive's "Rolodex" and calendar, and
all equipment and property of the Company which may be
in the Executive's possession or under his control,
whether or not relating to the claims released hereby,
including, without limitation, all such papers, work
papers, notes, documents and equipment in the
possession of the
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Executive, Executive's family and counsel; provided,
however, that the Executive may keep his "Rolodex" but
shall provide the Company with a copy of any
information contained thereon. The Executive agrees
that the Executive shall not retain copies of any such
papers, work papers, notes and documents.
Notwithstanding the foregoing, the Executive may keep
copies of any benefits agreements between the Executive
and the Company, this Agreement with supporting notes
and documentation, any publicly filed materials and any
employee benefit plan and stock option plan materials
distributed generally to participants in any such plan
by the Company.
B. Confidentiality and Non Disparagement. For purposes of
this Section 5 of this Agreement, the term
"Communicate" shall include without limitation, any
oral or written communication with any other person or
entity through any means including any electronic,
telephonic or other medium, directly or indirectly
publishing, or causing, participating in, assisting or
providing any statement or any information or making,
publishing, or producing or in any way participating in
placing into the public domain any statement, opinion
or information in connection with the publication of
any diary, memoir, letter story, photograph, interview,
article, essay, account or description (whether
fictionalized or not, whether written or electronic)
publication being deemed to include any presentation or
reproduction of any written, verbal or visual material
in any communication medium, including any book,
magazine, newspaper, theatrical production or movie, or
television or radio programming or commercial or
electronic medium of any kind.
(i) The Executive explicitly and fully agrees that he
will not at any time (a) defame, impugn or
impair the reputation or public perception of or
with respect to, or disparage, criticize or
otherwise made negative comments in respect of the
Company, its subsidiaries or affiliates, the
business, assets, properties, operations,
prospects, plans, performance (including stock
market performance), strategies, current or
former employees, directors, advisors,
stockholders, lenders, joint venture partners,
customers, tenants or borrowers of any of the
foregoing, and (b) will not Communicate the terms
or circumstances of the Executive's separation
from the Company or of this Agreement
(collectively, "Company Matters"). Company Matters
shall be deemed not to include the mutually
agreed upon departure statement with respect to
the Executive's separation from the Company
provided for by Section 5.D. of this Agreement.
In addition, the Executive explicitly and fully
agrees that at any and all times the Executive
will hold all confidential and proprietary
information (including
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without limitation the Company's financial
affairs or business processes or methods or
research, development or marketing programs
or plans, any other of its trade secrets,
any information regarding customers or
customer lists) in confidence for the
benefit of the Company, and the Executive
will not disclose to any third party in any
medium or use for the Executive's benefit or
that of any third party, any such
confidential information except to the
extent required by law or agreed to by the
Company.
(ii) Without limiting the foregoing, the
Executive further agrees that, from the
Separation Date until the Termination date,
the Executive will not, other than at the
request of the Company, Communicate with (a)
any reporters or any members of the press or
any other representative of any media or
publication ("Media Persons"), and (b) any
joint venture partners of the Company or its
subsidiaries or affiliates.
(iii) Notwithstanding anything to the contrary in
this Section 5, the Executive may confer in
confidence with the Executive's legal
counsel, make truthful statements if
required by law, and confer with his
immediate family members and personal
financial or tax advisors. In the event that
the Executive is required to make disclosure
under any court order, subpoena or other
judicial or governmental administrative
process, the Executive will promptly notify
the Company, take all reasonable steps
requested by the Company to defend against
compulsory disclosure and permit the Company
to participate with counsel of its choice
and at its expense in any proceeding
relating to the compulsory disclosure.
C. The Company and the Executive shall develop a
mutually acceptable public departure statement
regarding the Executive's separation from the
Company. The Company and the Executive shall develop
a mutually acceptable standard response for the
Executive to unsolicited inquiries from stockholders
of the Company, and Media Persons, which statement
shall be deemed not to be a violation of any
provision of this Section 5 if made in response to
any inquiry not solicited by the Executive. The
Company and the Executive will also develop a
mutually acceptable farewell "E-mail" from the
Executive to the employees of the Company.
D. Nothing in this Agreement is intended to prevent the
Executive from (i) using on the Executive's behalf
general knowledge or experience in any area of
professional activity, whether or not involving the
Executive's services with the Company; and (ii)
referring to the
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Executive's performance of services for the Company
as descriptive of the Executive's abilities and
qualifications for employment or engagement by any
other person.
VI. GENERAL RELEASE AND WAIVER OF CLAIMS.
------------------------------------
A. The Executive and the Company hereby unconditionally
and forever release, discharge and waive any and all
claims of any nature, whatsoever, whether legal,
equitable or otherwise which the Executive or the
Company may have against the other arising at any
time on or before the Separation Date. This mutual
release of all claims extends to any and all claims
of any nature, whatsoever, whether known, unknown or
capable or incapable of being known as of the
Separation Date or thereafter, with regard to actions
or omissions prior to the Separation Date. This
Agreement is a release of all claims of any nature
whatsoever by the Executive and the Company against
the other with regard to actions or omissions prior
to the Separation Date and includes, without
limitation, any and all claims, demands, causes of
action, liabilities whether known or unknown
including those arising from or related to the
Executive's employment relationship with the Company,
including but without limitation, any and all alleged
discrimination or acts of discrimination which
occurred or may have occurred on or before the
Separation Date based upon race, color, sex, creed,
national origin, age, disability or any other
violation of any Equal Employment Opportunity Law,
ordinance, rule, regulation or order, including but
not limited to, Title VII of the Civil Rights Act of
1964, as amended, the Civil Rights Act of 1966; the
Civil Rights Act of 1991; The Age Discrimination in
Employment Act, as amended ("ADEA") (as further
described in Section 7 below); the Fair Labor
Standards Act, as amended; the Americans with
Disabilities Act; and any similar state statute or
regulations. The parties agree and understand and
knowingly agree to this release because it is their
respective intent in executing this Agreement to
forever discharge each other from any and all
present, future, foreseen or unforeseen causes of
action with regard to actions or omissions prior to
the Separation Date. Nothing in this Section 6.A.
shall be deemed to limit the remedies of either party
set forth in Section 11 of this Agreement.
B. The Company and its successors and/or assigns, will
indemnify and defend the Executive with respect to
any claims that may be brought against the Executive
arising out of any action taken or not taken in the
Executive's capacity as an officer of the Company. In
addition, the Executive shall continue to be covered,
in respect of the Executive's activities as an
officer of the Company, by the Company's Directors
and
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Officer liability policy or other comparable policies
obtained by the Company's successors, to the extent
permitted by such policies.
VII. RELEASE AND WAIVER OF CLAIMS UNDER THE AGE DISCRIMINATION IN
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EMPLOYMENT ACT
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The Executive acknowledges that the Company encouraged him to
consult with an attorney of his choosing, and that he has
consulted with such attorney and through this Agreement
encourages him to consult with his attorney and he has so
consulted with such attorney with respect to possible claims
under the ADEA and that the Executive acknowledges that he
understands that the ADEA is a federal statute that prohibits
discrimination, on the basis of age, in employment, benefits,
and benefit plans. The Executive wishes to waive any and all
claims under the ADEA that he may have, as of the Separation
Date, against the Company, its shareholders, employees, or
successors and hereby waives such claims. The Executive
further understands that by signing this Agreement he is in
fact waiving, releasing and forever giving up any claim under
the ADEA that may have existed on or prior to the Separation
Date. The Executive acknowledges that the Company has informed
him that he has at his option, twenty-one (21) days in which
to sign the waiver of this claim under ADEA, and he does
hereby knowingly and voluntarily waive said twenty-one (21)
day period. The Executive also understands that he has seven
(7) days following the Separation Date within which to revoke
the release contained in this paragraph by providing a written
notice of his revocation of the release and waiver contained
in this Section to the Company. The Executive further
understands that this right to revoke the release contained in
this Section relates only to this Section and does not act as
a revocation of any other term of this Agreement. The
Executive acknowledges that the cash payment required by
Section 4.A. of this Agreement is in consideration for the
release contained in this Section 7. The Executive further
acknowledges that in the event of the revocation permitted by
this Section 7, he shall not receive the payment described in
the preceding sentence.
VIII. PROCEEDINGS.
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The Executive has not filed, and agrees not to initiate or
cause to be initiated on his behalf, any complaint, charge,
claim or proceeding against the Company or its affiliates
before any local, state or federal agency, court, arbitration
tribunal or other body relating to his employment or the
termination of his employment, other than wit respect to the
obligations of the Company to the Executive under this
Agreement (each, individually, a "Proceeding"), and agrees not
to voluntarily participate in any Proceeding. The Executive
waives any right he may have to benefit any manner from any
relief (whether monetary or otherwise) arising out of any
Proceeding.
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IX. CONTINUED COOPERATION.
---------------------
The Executive agrees to cooperate with all reasonable requests
by the Company with respect to matters relating to the
Executive's former position as chief Executive Officer of the
Company, including agreement to provide sworn testimony.
X. SURVIVAL OF COMPETITION, ETC. COVENANTS.
---------------------------------------
The Executive acknowledges and agrees that the covenants
contained in Section 6 and 7 of the Employment Agreement shall
survive the Separation Date and be effective for the periods
described therein as if those periods had commenced on
the Termination Date. Notwithstanding the foregoing, the
aforementioned covenants shall also remain in force from the
Separation Date to the Termination date.
XI. REMEDIES.
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The parties acknowledge, consent and agree that the remedies
at law available to the Company and the Executive for breach
of any of the obligations of this Agreement would be
inadequate and that damages flowing from such a breach may not
readily be susceptible to being measured in monetary terms.
Accordingly, the parties will have the right to seek both
damages and specific performance, including immediate
injunctive relief as remedies in the case of a breach by the
other party of this Agreement and nothing in this Agreement
will be deemed to eliminate, limit or otherwise inhibit such
rights or the right of either party to seek legal or equitable
remedies, including seeking immediate injunctive relief, in
connection with or arising out of any other action or omission
by the other party on or subsequent to the Separation Date.
XII. SEVERABILITY CLAUSE.
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In the event any provisions or part of this Agreement is found
to be invalid or unenforceable, only that particular provision
or part so found, and not the entire Agreement will be
inoperative. If any of the restrictions contained herein are
deemed to be unenforceable by reason of the extent, duration
or scope thereof, or otherwise, then the court or other
tribunal making such determination shall reduce the extent,
duration or other provisions hereof to the broadest provision
deemed by such tribunal to be enforceable, and in its reduced
form, this Agreement will then be enforceable in the manner
contemplated hereby. To the extent permitted by applicable
law, the parties hereto hereby waive any provisions of law now
or hereafter in effect which renders any provision hereof
unenforceable in any respect.
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XIII. RESOLUTION OF DISPUTES AND GOVERNING LAW.
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This Agreement will be governed by the laws of the State of
Georgia. Any dispute under this Agreement (including, but not
limited to, disputes regarding the obligations to make payment
hereunder) will be decided in accordance with the laws of the
State of Georgia, in a court of competent jurisdiction, with
each party bearing its own expenses and such dispute will not
be subject to arbitration.
XIV. NON-ADMISSION.
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Nothing contained in this Agreement will be deemed or
construed as an admission of wrongdoing or liability on the
Executive's part or on the part of the Company, or its
officers, employees, directors or representatives or agents.
XV. HEADINGS.
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Headings are given to the sections and subsections of this
Agreement solely as a convenience to facilitate reference.
Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of this
Agreement or any provision thereof.
THE PARTIES ACKNOWLEDGE THAT THEY HAVE CONSULTED WITH COUNSEL AND THAT SUCH
COUNSEL HAS REVIEWED THIS AGREEMENT AND THE PARTIES ACKNOWLEDGE FURTHER THAT
THEY HAVE READ THIS AGREEMENT, THAT THEY FULLY KNOW, UNDERSTAND AND APPRECIATE
ITS CONTENTS, THAT THEY EXECUTE SAME AND MAKE THIS AGREEMENT AND RLEEASE AND
AGREEMENTS PROVIDED FOR HEREIN VOLUNTARILY AND OF THEIR OWN FREE WILL.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
5th day of May, 2000.
PARAGON TRADE BRANDS, INC.
By: /S/ XXXX X. XXXXX /S/ XXXXX X. XXXXXXX
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Name: Xxxx X. Xxxxx Xxxxx X. Xxxxxxx
Title: EVP and Chief
Financial Officer Witnessed: /s/ Xxxx Xxxxxxxxxx
Xxxx Xxxxxxxxxx
5/30/00
