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EMPLOYMENT AGREEMENT
This Agreement (the "Agreement") effective as of March 1,1999 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 Xxxxx
Xxxxxx (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:
A. The Executive is currently employed as the Chief Operating Officer of
the Company and the Subsidiaries.
B. The Board of Directors of the Company desires to continue the services
of the Executive as President and Chief Operating Officer of the Company and
Executive Vice President and Chief Operating Officer of the Subsidiaries, which
are wholly owned by the Company, and to enter into an agreement embodying the
terms of those relationships.
C. The Executive is willing to serve as President and Chief Operating
Officer of the Company and Executive Vice President and Chief Operating Officer
of the Subsidiaries (so long as they are subsidiaries of the Company) and is
willing to accept continued employment by the Company on the terms set forth
herein.
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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.
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.
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
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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) 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,
1998, (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.
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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 elected to, or
is removed from, the offices or positions provided for in Section 4.1 of this
Agreement (whether or not the Company uses its best efforts to cause the
Executive to be elected as a director of the Company); (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 the
borough of Manhattan; (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;
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(j) there shall occur (i) any liquidation of the Company or the sale of
substantially all of the assets of the Company, or (ii) 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
consideration of at least $2 per share; (l) 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 (m) 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 President and Chief Operating Officer of the
Company and the Executive Vice President and Chief Operating Officer of 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 March 1, 1999 (the "Commencement
Date") and, unless terminated earlier pursuant to the terms hereof, shall
terminate on February 28, 2002 (the
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"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 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.
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
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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.
5. Compensation and Other Benefits.
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 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 (and in addition
to the Base Salary), 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
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(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.
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.
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.
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
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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, the
Executive shall be entitled to such paid vacation, fringe benefits and
perquisites as set forth in
Schedule 5.8.
6. TERMINATION.
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 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;
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(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 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 in the Company for Cause. The Company may terminate the
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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;
(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
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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.
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 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
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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.
(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
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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 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 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
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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 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.
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
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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 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
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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.
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, 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
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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.
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
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
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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, 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.
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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. 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.
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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.
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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.
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: Xxxxx Xxxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and to: Xxxxx Xxxxxx
0000 Xxxxxxxx Xxxxxx
Xxx. 00-X
Xxxx Xxx, Xxx Xxxxxx 00000
If to the Company: Aris Industries, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chairman
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.
15.10 JOINT AND SEVERAL OBLIGATIONS. Anything to the contrary
notwithstanding in
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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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
Attest: ARIS INDUSTRIES, INC.
By:
--------------------------- ----------------------------------
, Secretary Name:______________________
Title:_____________________
Attest: ECI SPORTSWEAR, INC.
By:
--------------------------- ----------------------------------
, Secretary Name:______________________
Title:_____________________
EUROPE CRAFT IMPORTS, INC.
By:
----------------------------------
Name:______________________
Title:_____________________
----------------------------------
Xxxxx Xxxxxx
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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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