Exhibit 10.2
June 15, 2004
Xx. Xxxxx XxXxxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Dear Xxxxx,
This letter agreement is our offer to employ you as Group President,
Intimate Apparel of The Warnaco Group, Inc. (together with its subsidiaries,
divisions and affiliates, the "Company"). Except as otherwise provided in this
agreement, the terms of your employment with the Company shall be governed by
the Warnaco Job Application and current Employee Handbook. The effectiveness of
this agreement is conditioned upon your passing a drug test for the presence of
illegal drugs. Capitalized terms not defined herein shall have the meaning set
forth in Exhibit A.
1. The Company agrees to employ you and you agree to serve as Group
President, Intimate Apparel of the Company, and you shall have such
authorities, duties and responsibilities commensurate with that
position. In carrying out your duties, you shall report to the Chief
Executive Officer of the Company. Without limiting the generality of
the foregoing, the following departments and/or functions within the
Intimate Apparel division shall report directly to you: Marketing,
Sales, Merchandising, Design, Operations and Human Resources. In
addition, the Intimate Apparel Finance department shall report to you
on a dotted-line basis. You agree to devote your full time and best
efforts to the satisfactory performance of such services and duties as
the position requires, and you shall be entitled to (i) serve on the
boards of directors of trade associations, charitable organizations
and for-profit businesses, subject to the reasonable approval of the
Chief Executive Officer and the Company's Board of Directors, (ii)
engage in charitable activities and community affairs and (iii) manage
your personal investments and affairs, provided that such activities
do not interfere with the proper performance of your duties and
responsibilities for the Company.
2. The term (the "Term") of your employment shall begin as of July 15,
2004 or such earlier date as we may actually agree to in writing (the
"Commencement Date") and end at the close of business on the third
anniversary of the Commencement Date; provided, however, that the Term
shall thereafter be automatically extended for additional one-year
periods unless either you or the Company gives the other written
notice at least 120 days prior to the then-scheduled expiration of the
Term that such party is electing not to so extend the Term.
Notwithstanding the foregoing, the Term shall end on the date on which
your employment is terminated by either party in accordance with the
provisions herein.
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June 15, 2004
Page 2
3. Your compensation shall be as follows:
a. During the Term, you shall be paid an annual base salary of
$650,000 ("Base Salary"), payable in semi-monthly payments of
$27,083.33. Your Base Salary may be reviewed annually by the
Compensation Committee of the Board of Directors in consultation
with the Chief Executive Officer and may be increased based on
such performance review within the Company's discretion. You
shall not be entitled to any additional compensation for service
as an officer or member of any board of directors of any
affiliate of the Company.
b. During the Term, commencing with the Company's fiscal year 2004,
you shall be eligible to receive an annual cash incentive award
under The Warnaco Group, Inc. Incentive Compensation Plan ("Bonus
Plan") with a target of 70% of Base Salary ("Target Bonus"). The
terms and conditions applicable to such annual cash incentive
award, including but not limited to the determination of
performance targets (following consultation with you), the
ultimate amount of such award, and the timing of payment of any
such award, shall be determined in accordance with the terms of
the Bonus Plan. For fiscal year 2004 and for fiscal year 2005,
you shall receive a guaranteed annual incentive award of no less
than $250,000. Any annual incentive award, including any annual
incentive award for fiscal year 2004, shall be payable when
bonuses for the applicable performance period are paid to other
senior executives of the Company.
c. Pursuant to the Warnaco 2003 Stock Incentive Plan (the "Plan"),
on the Commencement Date you will be granted 35,000 shares of
restricted stock ("restricted stock") and an option to purchase
210,000 shares of the Company's outstanding common stock (the
"option"), subject to the terms and conditions of such awards as
set out in the Plan. You may also be eligible to receive future
grants of restricted stock and/or options or other forms of
equity compensation at the sole discretion of the Compensation
Committee of the Board of Directors.
i. Except as otherwise provided herein, the restricted stock as
described herein and the option as described herein shall
vest 33% on July 15, 2005 and shall vest 33% on each of July
15, 2006 and July 15, 2007, provided that you are employed
by the Company on such vesting date and have not given
notice to the Company that you are voluntarily resigning,
without Good Reason (as defined in Exhibit A), prior to such
vesting date. The form of the Restricted Stock Award
Agreement for the restricted stock is attached hereto as
Exhibit B. The form of the
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June 15, 2004
Page 3
Non-Qualified Stock Option Agreement for the opt+-ion is
attached hereto as Exhibit C.
ii. You shall be subject to the equity ownership, retention and
other requirements applicable to senior executives of the
Company. Except as otherwise expressly provided herein, all
equity grants shall be governed by the applicable plan and
award agreement, as in effect on the date hereof and as may
be hereafter changed in accordance with such plan and
agreement.
4. While you are employed by the Company, and subject, of course, to the
Company's right to amend, modify or terminate any benefit plan or
program, you shall be entitled to participate in all Company employee
benefit plans applicable to senior executives, including the following
benefits/perquisites:
a. Reimbursement of reasonable business expenses incurred in
carrying out your duties and responsibilities under this
agreement, subject to documentation in accordance with Company
policy. In addition, the Company will reimburse you for your
legal and other professional fees reasonably incurred in
connection with the negotiation and drafting of this agreement,
up to a maximum of $10,000.
b. Perquisites provided to other senior executives, including a
monthly car allowance of up to $1,000.
c. Vacation - four weeks paid vacation per calendar year.
d. Reimbursement for COBRA medical and dental insurance premiums
from the date of termination of your employment with Liz
Claiborne until such time as the Company provides you with such
coverage.
e. Company-paid term life insurance payable to your designated
beneficiary in the amount of $1 million; provided that the
Company is able to obtain such insurance for a commercially
reasonable premium.
5. In the event your employment is terminated without Cause (as defined
in Exhibit A) by the Company (other than upon death or due to
Disability (as defined in Exhibit A)) or you resign for Good Reason
(as defined in Exhibit A) during the Term, you shall be entitled to:
a. Base Salary through the Date of Termination (as defined in
Exhibit A).
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June 15, 2004
Page 4
b. Payment of Base Salary as salary continuation for the remainder
of the Term, but in no event less than 12 months; provided that
if such termination is during the initial three year term, then
salary continuation shall be paid for a period of not less than
18 months.
c. A pro-rata bonus for the fiscal year in which the Date of
Termination occurs, based on the Company's performance for such
year (determined by multiplying the amount you would have
received had your employment continued through the end of such
fiscal year by a fraction, the numerator of which is the number
of days during such fiscal year that you are employed by the
Company and the denominator of which is 365), payable when
bonuses for such fiscal year are paid to other Company
executives; provided, that if the Date of Termination occurs in
fiscal 2004 or in fiscal 2005, such pro-rata bonus shall be no
less than $250,000.
d. Immediate vesting of that portion of the restricted stock
described in paragraph 3(c) above that would have vested if you
had been employed on the vesting date immediately following the
Date of Termination.
e. That portion of the option described in paragraph 3(c) above that
has vested as of the Date of Termination remaining exercisable
for two years following the Date of Termination.
f. Provided you make a timely election under COBRA, continued
participation on the same terms as immediately prior to the Date
of Termination (including costs of premiums) for you and your
eligible dependents in the Company's medical and dental plans in
which you and your eligible dependents were participating
immediately prior to the Date of Termination until the earlier of
(a) the end of the applicable Term (without regard to its earlier
termination hereunder), but in no event less than the period that
you are eligible to receive salary continuation, or (b) the date,
or dates, you receive equivalent coverage under the plans and
programs of a subsequent employer.
g. Any amounts earned, accrued or owing to you but not yet paid.
h. As a condition to receiving severance compensation pursuant to
this paragraph 5, you hereby agree to execute, and not revoke, a
general release of claims in a form acceptable to the Company
(provided you shall be afforded seven days after execution of
such release to revoke it, in which event you shall not be
entitled to the benefits provided herein other than as required
by law).
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June 15, 2004
Page 5
6. In the event your employment is terminated upon death or by the
Company due to Disability during the Term, you (or your estate or
legal representative, as the case may be) shall be entitled to:
a. Base Salary through the Date of Termination.
b. A pro-rata bonus for the fiscal year in which the Date of
Termination occurs, based on the Company's performance for such
year (determined by multiplying the amount you would have
received had your employment continued through the end of such
fiscal year by a fraction, the numerator of which is the number
of days during such fiscal year that you are employed by the
Company and the denominator of which is 365), payable when
bonuses for such fiscal year are paid to other Company
executives; provided, that if the Date of Termination occurs in
fiscal 2004 or fiscal 2005, such pro-rata bonus shall be no less
than $250,000.
c. Immediate vesting of 50% of the restricted stock described in
paragraph 3(c) above that remains unvested as of the Date of
Termination and 100% of that portion of the option described in
paragraph 3(c) above that remains unvested as of the Date of
Termination, with any vested portion of such option remaining
exercisable for 12 months following the Date of Termination.
d. Any amounts earned, accrued or owing to you but not yet paid.
7. In the event the Company terminates your employment for Cause or you
voluntarily resign, you shall be entitled to Base Salary through the
Date of Termination. In the event of your termination for Cause, the
unvested restricted stock described in paragraph 3(c) above and that
portion of the option described in paragraph 3(c) above that remains
unvested as of the Date of Termination shall be forfeited. In the
event of your voluntary resignation, the unvested restricted stock
described in paragraph 3(c) above and that portion of the option
described in paragraph 3(c) above that remains unvested as of the date
on which you provide written notice to the Company that you are
voluntarily resigning shall be forfeited. A voluntary resignation
shall be effective on 60 days prior written notice, subject to earlier
termination by the Company in accordance with Exhibit A, ---------
and, provided that such notice is given, shall not be deemed to be a
breach of this agreement.
8. In the event your employment is terminated without Cause by the
Company (other than upon death or due to Disability) or you resign for
Good Reason in both cases within one year following a Change in
Control (as defined on Exhibit A) (provided the Term is still in
effect or has expired during the one-year period), you shall be
entitled to:
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June 15, 2004
Page 6
a. Base Salary through the Date of Termination.
b. Payment of Base Salary as salary continuation for the remainder
of the Term, but in no event less than 12 months; provided that
if such termination is during the initial three year term, then
salary continuation shall be paid for a period of not less than
18 months.
c. A pro-rata bonus for the fiscal year in which the Date of
Termination occurs, based on the Company's performance for such
year (determined by multiplying the amount you would have
received had your employment continued through the end of such
fiscal year by a fraction, the numerator of which is the number
of days during such fiscal year that you are employed by the
Company and the denominator of which is 365), payable when
bonuses for such fiscal year are paid to other Company
executives; provided that if the Date of Termination occurs in
fiscal year 2004 or fiscal year 2005, such pro-rata bonus shall
be not less than $250,000.
d. Immediate vesting of 100% of any of the restricted stock
described in paragraph 3(c) above that remains unvested as of the
Date of Termination and 100% of that portion of the option
described in paragraph 3(c) above that remains unvested as of the
Date of Termination, with any vested portion of such option
remaining exercisable for six months following the Date of
Termination.
e. Provided you make a timely election under COBRA, continued
participation on the same terms as immediately prior to the Date
of Termination (including costs of premiums) for you and your
eligible dependents in the Company's medical and dental plans in
which you and your eligible dependents were participating
immediately prior to the Date of Termination until the earlier of
(a) the end of the applicable Term (without regard to its earlier
termination hereunder), but in no event less than the period that
you are eligible to receive salary continuation, or (b) the date,
or dates, you receive equivalent coverage under the plans and
programs of a subsequent employer.
f. Any amounts earned, accrued or owing to you but not yet paid.
g. As a condition to receiving severance compensation pursuant to
this paragraph 8, you hereby agree to execute, and not revoke, a
general release of claims in a form acceptable to the Company
(provided you shall be afforded seven days after execution of
such release to revoke it, in which event you shall not be
entitled to the benefits provided herein other than as required
by law).
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June 15, 2004
Page 7
9. In the event the Company provides written notice to you in accordance
with paragraph 2 above that the Term shall not renew and upon such
expiration of the Term the Company terminates your employment under
circumstances that during the Term would constitute a termination of
employment without Cause, you shall be entitled to:
a. Base Salary through the Date of Termination.
b. Payment of Base Salary as salary continuation for twelve months
following the Date of Termination.
c. That portion of the option described in paragraph 3(c) above that
has vested as of the Date of Termination remaining exercisable
for nine months following the Date of Termination.
d. Provided you make a timely election under COBRA, continued
participation on the same terms as immediately prior to the Date
of Termination (including costs of premiums) for you and your
eligible dependents in the Company's medical and dental plans in
which you and your eligible dependents were participating
immediately prior to the Date of Termination for the period you
are eligible to receive salary continuation following the Date of
Termination.
e. Any amounts earned, accrued or owing to you but not yet paid.
f. As a condition to receiving severance compensation pursuant to
this paragraph 9, you hereby agree to execute, and not revoke, a
general release of claims in a form acceptable to the Company
(provided you shall be afforded seven days after execution of
such release to revoke it, in which event you shall not be
entitled to the benefits provided herein other than as required
by law).
10. Any amounts due to you under paragraphs 5, 6, 8 or 9 are in the nature
of severance payments considered to be reasonable by the Company and
are not in the nature of a penalty. Any payments provided pursuant to
paragraph 5, paragraph 8 or paragraph 9 shall be in lieu of any salary
continuation arrangements under any other severance program or plan of
the Company.
11. Notwithstanding any other provision of this Agreement, upon the
termination of your employment for any reason, unless otherwise
requested by the Board, you shall immediately resign from all boards
of directors of any affiliate of the Company, if any, of which you may
be a member, and as a trustee of, or fiduciary to, any employee
benefit plans of the Company or any affiliate of the Company. You
agree
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June 15, 2004
Page 8
to execute any and all documentation of such resignations upon request
by the Company, but you shall be treated for all purposes as having so
resigned upon termination of your employment, regardless of when or
whether you execute any such documentation.
12. During the Term and thereafter (provided you are employed by the
Company) and for 12 months following the termination of your
employment with the Company and provided that you are receiving salary
continuation during such 12-month period, you agree that you will not,
other than in the ordinary course of performing your duties hereunder
or as agreed by the Company in writing, engage in a "Competitive
Business," directly or indirectly, as an individual, partner,
shareholder, director, officer, principal, agent, employee, trustee,
consultant, or in any relationship or capacity, in any geographic
location in which the Company or any of its affiliates is engaged in
business. You shall not be deemed to be in violation of this paragraph
12 by reason of the fact that you own or acquire, solely as an
investment, up to two percent (2%) of the outstanding equity
securities (measured by value) of any entity. "Competitive Business"
shall mean a business primarily engaged in apparel design, apparel
wholesaling or apparel retailing.
13. Upon any termination of employment (whether during or after the
expiration of the Term), you agree to refrain from directly or
indirectly soliciting any employee of the Company or an affiliate of
the Company to terminate his/her employment (excluding, only, your
personal assistant) on your own behalf or on behalf of any other
person or entity or from directly or indirectly hiring any key
employee (e.g., any management-level employee or any designer) of the
Company for a period of eighteen (18) months thereafter. In addition,
you agree that for a period of eighteen (18) months following the
termination of your employment (whether during or after the expiration
of the Term), with the Company, you will not, without the prior
written consent of the Company, directly or indirectly, solicit or
encourage any customer of the Company or any affiliate of the Company
to reduce or cease its business with the Company or any such affiliate
of the Company or otherwise interfere with the relationship of the
Company or any affiliate of the Company with its customers. You and
the Company each agree to refrain from making any statements or
comments of a defamatory or disparaging nature to third parties
regarding each other (including, in the case of the Company, an
affiliate of the Company or the Company's officers, directors,
personnel or products). You and the Company each understand that
either party should be entitled to respond truthfully and accurately
to statements about such party made publicly by you or the Company, as
the case may be, provided that such response is consistent with your
or the Company's obligations not to make any statements or comments of
a defamatory or disparaging nature as set forth herein above.
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June 15, 2004
Page 9
14. You acknowledge that in your capacity as senior management you have
had or will have a great deal of exposure and access of the Company's
trade secrets and confidential and proprietary information. During the
Term and thereafter, other than in the ordinary course of performing
your duties for the Company or as required in connection with
providing any cooperation to the Company pursuant to paragraph 20
below, you agree that you will not disclose to anyone or make use of
any trade secret or proprietary or confidential information of the
Company or any affiliate of the Company, including such trade secret
or proprietary or confidential information of any customer or other
entity to which the Company owes an obligation not to disclose such
information, which you acquire during the course of your employment,
including, but not limited to, records kept in the ordinary course of
business, except when required to do so by a court of law, by any
governmental agency having supervisory authority over the business of
the Company or by any administrative or legislative body (including a
committee thereof) with apparent or actual jurisdiction to order you
to divulge, disclose or make accessible such information. The
foregoing shall not apply to information that (i) was known to the
public prior to its disclosure by you or (ii) becomes known to the
public through no wrongful disclosure by or act of you or any of your
representatives. In the event you are requested by subpoena, court
order, investigative demand, search warrant or other legal process to
disclose any information regarding the Company, you agree, unless
prohibited by law or Securities and Exchange Commission regulation, to
give the Company's General Counsel prompt written notice of any
request for disclosure in advance of your making such disclosure and
you shall not disclose such information regarding the Company unless
and until the Company has expressly authorized you to do so in writing
or the Company has had a reasonable opportunity to object to such a
request or to litigate the matter (of which the Company agrees to keep
you reasonably informed) and has failed to do so; provided, however,
that you may make disclosure (after consultation with the Company's
General Counsel to the extent that time and circumstances permit) if
you believe that a failure to do so may subject you to civil or
criminal liability or sanction.
15. You hereby sell, assign and transfer to the Company all of your right,
title and interest in and to all inventions, discoveries, improvements
and copyrightable subject matter (the "Rights") which during the
period of your employment are made or conceived by you, alone or with
others, and which are within or arise out of any general field of the
Company's business or arise out of any work you perform, or
information you receive regarding the business of the Company, while
employed by the Company. You shall fully disclose to the Company as
promptly as available all information known or possessed by you
concerning any Rights, and upon request by the Company and without any
further remuneration in any form to you by the Company, execute all
applications for patents and for copyright registration, assignments
thereof and other
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June 15, 2004
Page 10
instruments and do all things which the Company may deem necessary to
vest and maintain in it the entire right, title and interest in and to
all such Rights.
16. You agree that at the time of the termination of employment, whether
at your instance or the Company, and regardless of the reasons
therefore, you will promptly deliver to the Company's General Counsel,
and not keep or deliver to anyone else, any and all of the following
which is in your possession or control: (i) Company property
(including, without limitation, credit cards, computers, communication
devices, home office equipment and other Company tangible property)
and (ii) notes, files, memoranda, papers and, in general, any and all
physical matter and computer files containing confidential or
proprietary information of the Company or any of the Company's
affiliates, including any and all documents relating to the conduct of
the business of the Company or any of the Company's affiliates and any
and all documents containing confidential or proprietary information
of the customers of the Company or any of the Company's affiliates,
except for (x) any documents for which the Company's General Counsel
has given written consent to removal at the time of termination, (y)
any documents on your personal computer if you destroy such documents
and give a notarized written affidavit of such destruction and (z) any
information necessary for you to retain for tax purposes (provided you
maintain the confidentiality of such information in accordance with
paragraph 14 above). In addition, you may retain such records as
relate to your compensation, benefits, expenses, job description and
job performance, as well as any personal memorabilia.
17. Any failure by you to comply with the provisions of paragraphs 12, 13,
14, 15 or 16 shall relieve the Company of any of its obligations
pursuant to this agreement, including pursuant to paragraphs 5, 6, 8
and 9; provided, however, that if such failure is curable, the Company
shall give you prompt notice and 30-day period to cure such failure.
If so cured, all of the Company's obligations hereunder shall remain
in full force and effect.
18. From and after the date hereof, except as otherwise provided in
paragraph 19, should any disagreement, claim or controversy arise
between you and the Company with respect to this agreement or your
employment by the Company, the same may be enforced at the option of
either party by confidential, binding and final arbitration in New
York, New York before a single arbitrator in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.
The award of the arbitrator with respect to such disagreement, claim
or controversy shall be enforceable in any court of competent
jurisdiction and shall be binding upon the parties hereto. You consent
to the personal jurisdiction of the Courts of the State of New York
(including the United States District Court for the Southern District
of New York) in any proceedings for equitable relief. You further
agree not to interpose any objection or improper venue in any such
proceeding or interpose any defense that
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June 15, 2004
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the Company has an adequate remedy at law or that the injury suffered
by the Company is not irreparable. You and the Company agree that each
party shall be responsible for its own costs and expenses, including
attorneys' fees, provided, however, that if you substantially prevail
with respect to all claims that are the subject matter of the dispute
relating to this agreement, your costs, including reasonable
attorneys' fees, shall be borne by the Company.
19. You expressly agree and acknowledge that any breach or threatened
breach of any obligation set forth in paragraphs 12, 13, 14, 15 or 16
above will cause the Company irreparable harm for which there is no
adequate remedy at law, and as a result of this the Company shall be
entitled to seek the issuance by a court of competent jurisdiction of
an injunction, restraining order or other equitable relief in favor of
itself, without the necessity of posting a bond and without proving
actual damages, restraining you from committing or continuing to
commit any such violation.
20. Following the Date of Termination, upon reasonable request by the
Company, you shall cooperate with the Company or any of its affiliates
with respect to any legal or investigatory proceeding, including any
government or regulatory investigation, or any litigation or other
dispute relating to any matter in which you were involved or had
knowledge during your employment with the Company, subject to your
reasonable personal and business schedules. The Company shall
reimburse you for all reasonable out-of-pocket costs, such as travel,
hotel, and meal expenses, and reasonable attorneys' fees, incurred by
you in providing any cooperation pursuant to this paragraph 20, as
well as a reasonable per diem amount for your time.
21. You represent and warrant that you have the free and unfettered right
to enter into this agreement and to perform your obligations under it
and that you know of no agreement between you and any other person,
firm or organization, or any law or regulation, that would be violated
by the performance of your obligations under this agreement. You agree
that you will not use or disclose any confidential or proprietary
information of any prior employer in the course of performing your
duties for the Company or any of its affiliates.
22. The invalidity or unenforceability of any particular provision or
provisions of this agreement (as determined by an arbitrator or a
court of competent jurisdiction) shall not affect the other provisions
hereof and this agreement shall be construed in all respects as if
such invalid or unenforceable provisions had been omitted.
23. This agreement (including its Exhibits) and the documents referred to
herein constitute the full and complete understanding and agreement of
the parties, supersede all prior representations, understandings and
agreements as to your employment by the Company and cannot be amended,
changed, modified in any
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June 15, 2004
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respect, without the written consent of the parties, except that the
Company reserves the right in its sole discretion to make changes at
any time to the other documents referenced in this letter agreement.
No waiver by either party of any breach by the other party of any
condition or provision contained in this agreement shall be deemed to
be a waiver of a similar or dissimilar condition or provision.
24. This agreement shall be binding upon and shall inure to the benefit of
successors and assigns of the Company.
25. This agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to its provisions as
to choice of laws. The respective rights and obligations of the
parties hereunder, including without limitation paragraphs 12 through
16, shall survive any expiration of the Term, including expiration
thereof upon your termination of employment for whatever reason, to
the extent necessary to the intended preservation of such rights and
obligations.
26. Any notice given to either you or the Company under this agreement
shall be in writing and shall be deemed to have been given upon actual
receipt or refusal to accept receipt, with any such notice duly
addressed to you or the Company, as the case may be, at the address
indicated below or to such other address as such party may
subsequently designate by written notice in accordance with this
paragraph 26: If to the Company: The Warnaco Group, Inc., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel; If to
you: at your home address as indicated on the Company's records.
27. The Company may withhold from any amounts payable under this agreement
such Federal, state, local or other taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
Your signature below will signify that you have read, and understand and
agree to, the terms and conditions contained in each item of the new-hire
paperwork.
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June 15, 2004
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This agreement shall not be binding on the Company until you sign, date and
deliver an original of this agreement to Xxx X. Xxxxxxxx at the Company's
address set forth in paragraph 26 above and its effectiveness is contingent on
the circumstances set forth in the introductory paragraph of this agreement and
the validity of your representation in paragraph 21. If the foregoing is
agreeable to you, please sign both copies of this agreement and return them to
me. A fully executed original will be returned to you.
Very truly yours,
THE WARNACO GROUP, INC.
/s/ Xxx X. Xxxxxxxx
-------------------
Xxx X. Xxxxxxxx
Vice President, General Counsel & Secretary
Agreed to and accepted this
15th day of June, 2004
/s/ Xxxxx XxXxxxxxx
-------------------
Xxxxx XxXxxxxxx
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June 15, 2004
Page 14
EXHIBIT A
DEFINITIONS
"CAUSE" shall mean:
(i) willful misconduct by you which is materially injurious to the
Company's interests;
(ii) willful breach of duty by you in the course of your employment that is
materially injurious to the Company's interests and which, if curable,
is not cured within 10 days after your receipt of written notice from
the Company;
(iii) willful failure by you after having been given written notice from the
Company to perform any and all duties commensurate with your position
and a reasonable opportunity to perform such duties as are specified in
the written notice, other than a failure resulting from your incapacity
due to physical or mental illness, provided that such instructions are
consistent with this Agreement and in your reasonable belief do not
subject you to liability or sanction; or
(iv) indictment of you for the commission of a felony.
"CHANGE IN CONTROL" shall mean any of the following:
(i) any "person" (as such term is used in Sections 3(a)(9) and 13(d) of the
Securities Exchange Act of 1934), but excluding a person who owns more
than 5% of the outstanding shares of the Company as of the Commencement
Date, becomes a "beneficial owner" (as such term is used in Rule 13d-3
promulgated under that Act), of 50% or more of the Voting Stock of the
Company, provided that any sale or transfer of Voting Stock by
shareholders as of the Commencement Date shall not constitute a Change
in Control; or
(ii) all or substantially all of the assets of the Company are disposed of
pursuant to a merger, consolidation or other transaction (unless the
shareholders of the Company immediately prior to such merger,
consolidation or other transaction beneficially own, directly or
indirectly, in substantially the same proportion as they owned the
Voting Stock of the Company, all of the Voting Stock or other ownership
interests of the entity or entities, if any, that succeed to the
business of the Company).
For purposes of this Change in Control definition, "Voting Stock" shall
mean the capital stock of any class or classes having general voting power, in
the absence of specified contingencies, to elect the directors of the Company.
Xx. Xxxxx XxXxxxxxx
June 15, 2004
Page 15
"DATE OF TERMINATION" shall mean:
(i) if your employment is terminated by the Company, the date specified in
the notice by the Company to you that your employment is so terminated;
(ii) if you voluntarily resign your employment, 60 days after receipt by the
Company of written notice that you are terminating your employment
(provided, that if you commence other employment, the Company may (a)
accelerate the Date of Termination to an earlier date so that there is
no overlap with such other employment by providing you with written
notice of such action, or (b) alternatively, place you on paid leave
(covering only Base Salary) during such period irrespective of whether
you commence other employment);
(iii) if your employment is terminated by reason of death, the date of death;
or
(iv) if you resign your employment for Good Reason, 30 days after receipt by
the Company of timely written notice from you in accordance with
paragraph 26 of the letter agreement dated June 15, 2004 between you
and the Company (the "Letter Agreement"), unless the Company cures the
event or events giving rise to Good Reason within 30 days after receipt
of such written notice.
"DISABILITY" shall mean your inability, due to physical or mental incapacity, to
substantially perform your duties and responsibilities for a period of
120 consecutive days as determined by a medical doctor selected by the
Company and reasonably acceptable to you.
"GOOD REASON" shall mean the occurrence of any of the following without your
consent:
(i) a material diminution in your authority, duties or responsibilities as
Group President - Intimate Apparel of the Company;
(ii) a reduction in your Base Salary or Target Bonus;
(iii) a change in reporting structure so that you report to someone other
than the Chief Executive Officer of
the Company;
(iv) the removal by the Company of you as Group President - Intimate Apparel
of the Company;
(v) the failure of a successor to all or substantially all of the assets of
the Company to assume the Company's obligations under the letter
agreement either in writing or as a matter of law;
Xx. Xxxxx XxXxxxxxx
June 15, 2004
Page 16
(vi) requiring you to be principally based at any office or location other
than Manhattan, New York or any location within a 45 mile radius of
Manhattan, New York; or
(vii) requiring you to travel from your primary office location more than 50%
of the Company's regularly schedule working days or more than 30% of
non-working days, as measured over any consecutive 12-month period.
Anything herein to the contrary notwithstanding, you shall not be
entitled to resign for Good Reason unless you give the Company written notice of
the event constituting "Good Reason" within 60 days of the occurrence of such
event and the Company fails to cure such event within 30 days after receipt of
such notice.
