Exhibit 10.10
SEVERANCE AGREEMENT
SEVERANCE AGREEMENT, dated as of May 5, 1997, by and between Great American
Knitting Xxxxx, Inc., a debtor and a debtor in possession, having its principal
offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company") and Xxxxx
Xxxxxx whose address is 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000
("Employee").
W I T N E S S E T H:
IT IS AGREED between the parties as follows:
1. In consideration of Employee's valuable contribution to the Company
and Employee's continued employment with the Company, the Company hereby agrees
to provide Employee with a special severance benefit as set forth herein. In
the event that, during the period of the Company's Chapter 11 proceedings or
within one (1) year from the date of confirmation of a plan of reorganization
for Great American Knitting Xxxxx, Inc., (i) Employee's employment with the
Company is terminated by the Company without Just Cause (as herein defined), or
(ii) the Company, or all or substantially all of its assets, is sold to another
company in the hosiery business and Employee elects to terminate his employment
because he is not maintained at that time or during the twelve months following
the sale in a job comparable to his present job and at not less than the same
salary and at the same location or another location within a reasonable
commuting distance therefrom, the Company will pay Employee, as a severance
benefit, an amount equal to Employee's then current base salary (excluding any
bonus compensation) for a period of twelve (12) months (the "Severance Amount").
As used in this Agreement, "Just Cause" is defined as (i) commission of wilful
or intentional misconduct that could reasonably be expected to materially injure
the reputation, business or business relationships of the Company, or result in
personal enrichment at the expense of the Company, (ii) failure to report for
work unless prevented from doing so because of illness, vacation, or other
authorized leave granted by the Company, (iii) theft, embezzlement or engaging
in any other criminal activity, (iv) provision of services to a competitor of
the Company, (v) disclosure of any trade secret or confidential information of
the Company, or (vi) excessive use of alcohol or use of illegal drugs.
2. (a) The Severance Amount shall be payable over a period of twelve (12)
months (the "Payment Period") in accordance with the normal payroll cycle of the
Company.
(b) The payment provided for in this Agreement shall constitute the
exclusive payment due Employee by reason of the termination of employment,
including any payment which may
otherwise be payable pursuant to any other separation or severance policy
established or maintained by the Company, but shall have no effect on any other
benefits which may be due Employee under any plan of the Company which provides
benefits (other than separation or severance pay) after termination of
employment.
(c) Receipt of the payment provided for in this Agreement shall be
conditioned upon Employee's executing and delivering to the Company the
Company's standard general release form.
3. In consideration of the payment provided for in this Agreement,
Employee agrees that following the termination of employment Employee will not
disclose, or use for the benefit of any third party, any information relating to
the confidential affairs of the Company and its affiliates, including but not
limited to business and marketing plans, customer lists, strategies, customer
information, other information concerning the Company's and its affiliates'
products, promotions, development, financing, expansion plans, business policies
and practices, and other forms of information considered by the Company and its
affiliates to be confidential and in the nature of trade secrets. This
confidentiality covenant has no temporal, geographical or territorial
restriction.
4. In the event the Employee breaches his or her obligations hereunder,
in addition to any other rights or remedies available at law or in equity, the
Company's obligations hereunder shall cease. Further, the Employee acknowledges
and agrees that the Company's remedy at law for breach or threatened breach of
any of the provisions of paragraph 3 of this Agreement would be inadequate, and
in recognition of that fact, in the event of a breach or threatened breach by
the Employee of any obligation under paragraph 3 of this Agreement, it is
agreed, in addition to its remedies at law, the Company shall be entitled to
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which may
then be available. Nothing herein contained shall be construed as prohibiting
the Company from pursuing any other remedies available to it for such breach or
threatened breach. The Company shall not be required to post any bond in
connection with any such relief.
5. Nothing herein contained shall confer upon Employee a right to
continue as an employee of the Company or affect any rights of the Company to
terminate the employment of Employee for any reason whatsoever, subject,
however, to the payment of the amounts provided for in this Agreement.
6. The payment of the Severance Benefit shall automatically terminate
upon Employee becoming a full-time
2
employee or full-time consultant (including self-employment) of any corporation,
person or other business entity (an "Entity"). Employee shall immediately
inform the Company upon Employee's becoming a full-time employee or full-time
consultant of any Entity. In such event, any payments of the Severance Amount
shall cease, effective as of Employee's first day of employment or consultancy
with the Entity.
7. This Agreement is personal in nature and may not be assigned or
transferred by Employee, but shall be binding upon the assigns or successors of
the Company. In the event the Company breaches its obligations under this
Agreement, Employee shall be entitled to be reimbursed for Employee's costs,
including reasonable attorneys' fees, in enforcing Employee's rights under this
Agreement.
8. This Agreement shall be governed by the laws of the State of New York
applicable to contracts made and to be performed in the State of New York.
9. This Agreement contains the entire understanding and agreement between
the parties hereto with respect to the subject matter hereof, and supersedes all
prior written understandings and agreements relating to the payment of severance
benefits to the Employee and may not be modified, discharged or terminated, nor
may any of the provisions hereof be waived, except in writing signed by the
parties hereto.
10. On July 17, 1995, the Company filed a voluntary petition for
reorganization under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court").
The parties agree and acknowledge that this Agreement is expressly subject to
approval by order of the Bankruptcy Court, without which this Agreement is null
and void and without force or effect.
GREAT AMERICAN KNITTING XXXXX, INC.
/s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxxx
------------------------- -----------------------------
Xxxxx Xxxxxx Title: President
--------------------------
3
