Exhibit 10.28
SEVERANCE AGREEMENT
This Severance Agreement is made and entered into as of this 12 day of
January, 2000 by and between Designs, Inc. (the "Company"), a corporation
organized and existing under the laws of Delaware with a principal place of
business at 00 X Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000, and Xxxx X. Xxxxxxxx
("Xxxxxxxx"), an individual residing at 00 Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx
00000.
WHEREAS, the Company and Xxxxxxxx are parties to an Employment Agreement
dated as of October 16, 1995 (the "Employment Agreement") whereby Xxxxxxxx was
employed as President and Chief Executive Officer of the Company; and
WHEREAS, the Company and Xxxxxxxx wish to resolve Xxxxxxxx'x separation
from employment with the Company and establish the terms of Xxxxxxxx'x xxxxxxxxx
arrangement.
NOW THEREFORE, in consideration of the promises and conditions set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Separation Date. The Company and Xxxxxxxx agree that the effective date
of Xxxxxxxx'x separation from the Company was November 19, 1999 (the "Separation
Date"). From and after the Separation Date, Xxxxxxxx was no longer an employee
of the Company and had no further duties or responsibilities to act on behalf of
the Company, except as provided herein.
2. Severance Payments. The Company shall pay Xxxxxxxx the aggregate sum of
Five Hundred Seventy Three Thousand Five Hundred Fifty Seven Dollars and Fifty
Cents ($573,557.50) (the "Severance Payment"), in accordance with the attached
Payment Schedule. Payments shall be made by direct deposit to Xxxxxxxx'x account
and are deemed paid on the date the deposits are made. Xxxxxxxx shall be liable
for, and shall pay
in full when due, any and all local, state and federal income taxes related to
the Severance Payment. Xxxxxxxx will receive a Form 1099 from the Company at the
end of each calendar year. To the extent Xxxxxxxx accepts employment after the
Separation Date, the Company agrees that the Severance Payment may not be offset
by any amount he receives from a future employer.
3. Medical/Dental Insurance. To the extent permitted by the applicable
insurance policies, the Company shall continue to provide Xxxxxxxx with family
medical and dental insurance coverage during the period from the Separation Date
until May 31, 2000, at Xxxxxxxx'x sole cost and expense. Thereafter, Xxxxxxxx
shall be entitled to apply for and receive continuation of medical insurance
coverage at his sole cost and expense through COBRA until November 30, 2001. The
current cost for Xxxxxxxx'x family medical and dental insurance coverage for the
period from the Separation Date until May 31, 2000 is set forth on the attached
Payment Schedule and the costs shall be deducted from the Severance Payment due
to Xxxxxxxx from the Company.
4. Vehicle. The Company shall transfer all of its rights, title and
interest in the 1997 Range Rover HSE 4.6 vehicle to Xxxxxxxx in "AS IS"
condition. The Company hereby acknowledges and agrees that Xxxxxxxx purchased
the vehicle from the Company for $26,442.50 in an arm's length transaction.
5. Family Discount Card. Xxxxxxxx shall be permitted to retain his Family
Discount Card ("Card") until the date of the last Severance Payment, at which
time Xxxxxxxx shall immediately return the Card to the Company. Xxxxxxxx shall
only be permitted to use the Card to purchase merchandise for his immediate
family.
6. Legal Fees. In the event either party breaches any of such party's
obligations under this Severance Agreement, the non-breaching party shall be
entitled to recover all reasonable costs incurred by such non-breaching party in
enforcing the terms of the Severance Agreement, including reasonable attorneys'
fees. The prevailing party shall be entitled to recover its reasonable
attorneys' fees and expenses in any litigation that arises out of or relates to
this Severance Agreement.
7. Options. Xxxxxxxx hereby acknowledges and agrees that any and all
incentive stock options, non-qualified stock options and/or any other stock
options granted
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to him during his employment with the Company shall expire and/or terminate as
of the date of this Severance Agreement.
8. Continued Assistance. Xxxxxxxx agrees that he will devote whatever time
is necessary after the Separation Date to work with and assist the Company in
any litigation, arbitration or other proceeding that is currently pending or
threatened involving the Company, which shall include, but not be limited to,
testifying at any deposition, hearing, proceeding or trial and meeting with
representatives of the Company to discuss the factual history of such matters.
The Company agrees to compensate Xxxxxxxx for all reasonable out of pocket
expenses associated with his cooperation pursuant to this paragraph. The Company
agrees further to schedule such assistance/cooperation at such times as to
minimize inconvenience and/or disruption to Xxxxxxxx'x professional and personal
schedule.
9. References. All responses to any inquiries made to the Company
regarding Xxxxxxxx'x employment references shall be limited to providing dates
of employment, title and salary information. If additional information is
requested, the Company may state that the foregoing information is the only
information that the Company can provide or words to that effect.
10. Non-disparagement. The Company agrees that its officers and directors
will not make any public or private statement that disparages Xxxxxxxx unless
required by law and that it will use its best efforts to have its agents,
employees and consultants comply with this provision. Xxxxxxxx agrees that he
will not make any public or private statement which disparages the Company or
its officers, directors, employees or consultants unless required by law, and
that he will use his best efforts to have his agents and consultants comply with
this provision.
11. Confidentiality. The parties hereto agree that the terms and
conditions of this Severance Agreement shall be treated as confidential and
shall not be disclosed except as necessary to their respective employees,
officers, directors and financial, investment and legal advisors, as required by
law, or to enforce the terms of this Severance Agreement. Xxxxxxxx may also
disclose the terms and conditions of the Severance Agreement to his immediate
family. In the event Xxxxxxxx and/or the Company disclose the terms and
conditions of the Severance Agreement to any of the foregoing persons or
entities, they
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shall advise such persons and/or entities that the terms and conditions of this
Severance Agreement are confidential and that they shall not disclose the
information to any other person or entity. Notwithstanding the foregoing, the
parties acknowledge and agree (i) that disclosure of this Severance Agreement
and/or the material terms thereof will likely be required by the Company in its
filings with the Securities and Exchange Commission, and (ii) that the Severance
Agreement or the material terms thereof may be disclosed to State Street Bank
and Trust Company.
12. Non-Disclosure.
(a) Xxxxxxxx agrees that he will not disclose to any person or
entity, either orally or in written form, except as required by law, any
confidential information relating to the Company or any of its
subsidiaries and affiliates, the directors of the Company or its
subsidiaries and affiliates, any client of the Company or any of its
subsidiaries and affiliates, or any corporation, partnership or other
entity owned or controlled, directly or indirectly, by any of the
foregoing, or in which any of the foregoing has a beneficial interest,
including, but not limited to, the business affairs of each of the
foregoing. Such confidential information shall include, but shall not be
limited to, proprietary technology, trade secrets, patented processes,
research and development data, know-how, market studies and forecasts,
competitive analyses, pricing policies, employee lists, personnel
policies, the substance of agreements with customers, suppliers and
others, marketing or dealership arrangements, servicing and training
programs and arrangements, customer lists and any other documents,
including copies of such information in electronic form, embodying such
confidential information.
(b) The non-disclosure obligation set forth above shall not apply to
any information (i) which was in the public domain at the time of
disclosure or (ii) which thereafter fell into the public domain without
any fault of Xxxxxxxx and which was not disclosed in violation of any
similar non-disclosure obligation by any other person.
(c) Xxxxxxxx hereby represents that he left with the Company all
documents, computer disks, records, reports, writings and other similar
documents containing confidential information, including copies thereof
then in his possession
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or control, except those documents which are his personal copies of
documents relating to the terms and conditions of his employment with or
resignation from the Company. Xxxxxxxx further represents that, except as
provided herein, he returned to the Company all other assets and/or
property belonging to the Company.
13. Non-Competition and Non-Solicitation.
(a) Xxxxxxxx agrees that during the period commencing on the
Separation Date and ending on November 19, 2001, he shall not work for
Levi Xxxxxxx & Co., and he shall not, directly or indirectly, as owner,
partner, joint venturer, stockholder, employee, broker, agent, principal,
trustee, corporate officer, director, licensor, or in any capacity
whatsoever, engage or assist any person or entity to engage in the Levi's
or Dockers outlet business in any location in any geographic area in the
United States or Puerto Rico; provided, however, that Xxxxxxxx may own any
securities of any corporation which is engaged in such business and is
publicly owned and traded but in an amount not to exceed at any one time
one percent (1%) of any class of stock or securities of such corporation.
(b) During the period commencing on the Separation Date and ending
on November 19, 2001, Xxxxxxxx shall not request any suppliers or
customers with whom the Company has a business relationship to cancel or
terminate any such business relationship with the Company or solicit any
employee of the Company to leave the Company's employ. Notwithstanding the
foregoing, nothing contained herein shall constitute the Company's
approval or acquiescence of any actions taken by Xxxxxxxx after November
19, 2001 to seek to cause the cancellation or termination of any business
relationship between the Company and any third party and the Company
reserves the right to assert any claims it may have against Xxxxxxxx
arising out of his conduct.
(c) Except for the limitations and restrictions contained in this
Severance Agreement, Xxxxxxxx and the Company agree that the
post-employment restrictions contained in the Employment Agreement,
including without limitation the post employment competition restrictions
contained in paragraph 9 of the Employment Agreement are hereby waived and
released and shall have no further force or effect, such that Xxxxxxxx
shall be entitled to accept future employment.
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14. Xxxxxxxx Release. Xxxxxxxx hereby voluntarily and irrevocably
releases and forever discharges the Company and its subsidiaries (including
their successors and assigns) and each of their current and former officers,
directors, shareholders, employees, consultants, representatives and agents
(hereinafter the "Company Releasees") from all charges, complaints, claims,
promises, agreements, obligations, causes of action, damages, and debts
(including attorneys' fees and costs actually incurred), known or unknown, which
Xxxxxxxx has, had, or hereinafter may have, directly or indirectly, relating to
or arising out of any conduct pertaining to the most recent proxy contest and
annual meeting of the Company or relating to or arising out of his employment
with or services performed for the Company, from the beginning of the world to
the day of the date of this Severance Agreement, including, without limitation,
all claims for breach of contract, all claims arising out of or relative to
Xxxxxxxx'x employment with the Company and the termination thereof and any
claims Xxxxxxxx may have under the Employment Agreement, all claims for breach
of an implied covenant of good faith and fair dealing, intentional or negligent
misrepresentation, any acts or omissions by the Company Releasees, and unlawful
discrimination under the common law or any statute (including, without
limitation, Title VII of the Civil Rights Act of 1964, 42 U.S.C. ss.2000e, et
seq., the Age Discrimination in Employment Act of 1967, 29 U.S.C. ss.621, et
seq., the Employee Retirement Income Security Act, 29 U.S.C. ss.1001, et seq,
and the Americans with Disabilities Act of 1990, 42 U.S.C. ss.12101, et seq.)
Notwithstanding the foregoing, this Release shall not release or limit
Xxxxxxxx'x rights to indemnification under the terms of the By-Laws of the
Company and under the Indemnification Agreement between Xxxxxxxx and the Company
dated as of December 10, 1998, as in effect on the date hereof, or to enforce
this Severance Agreement or bring claims for breach thereof.
15. Company Release. The Company, on behalf of itself and its officers,
directors, agents, representatives, subsidiaries, consultants and shareholders
(hereinafter the "Company Releasors") hereby voluntarily and irrevocably
releases and forever discharges Xxxxxxxx and his heirs and survivors from any
and all charges, complaints, claims, promises, agreements, obligations, causes
of action, damages and debts, (including attorneys' fees and costs actually
incurred), known or unknown, that the Company Releasors, individually or
jointly, have, had or hereinafter may have, directly or indirectly,
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relating to or arising out of any conduct pertaining to the most recent proxy
contest and annual meeting of the Company or relating to or arising out of
Xxxxxxxx'x employment with or services performed for the Company from the
beginning of the world to the day of the date of this Severance Agreement,
including, without limitation, all claims for breach of contract, all claims for
breach of an implied covenant of good faith and fair dealing, intentional or
negligent misrepresentation, mismanagement, nondisclosure, or any acts or
omissions by Xxxxxxxx during the course of his employment or any claims the
Company may have under the Employment Agreement. Notwithstanding the foregoing,
this release shall not limit the Company's rights to enforce this Severance
Agreement or to bring any claims for breach thereof.
16. Arbitration of Disputes. Any controversy or claim arising out of or
relating to this Severance Agreement or the breach thereof shall, to the fullest
extent permitted by law, be settled by arbitration in any forum and form agreed
upon by the parties or, in the absence of such an agreement, under the auspices
of the American Arbitration Association ("AAA") in Boston, Massachusetts, in
accordance with the rules of the AAA, including, but not limited to, the rules
and procedures applicable to the selection of arbitrators. Judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. This Section 16 shall be specifically enforceable. Notwithstanding the
foregoing, this Section 16 shall not preclude either party from pursuing a court
action for the sole purpose of obtaining a temporary restraining order or a
preliminary injunction in circumstances in which such relief is appropriate;
provided, however, that any other relief shall be pursued through an arbitration
proceeding pursuant to this Section 16.
17. Trust Agreement. Xxxxxxxx hereby relinquishes any and all rights,
title and interest that he had, has or may have in, arising out of or relating
to the Trust Agreement ("Trust Agreement") made as of May 12, 1999 by and
between the Company and State Street Bank and Trust Company ("State Street") or
the assets held thereunder. Xxxxxxxx agrees and consents to the termination of
the Trust Agreement and the return of all trust assets by State Street to the
Company and shall execute any and all documents necessary to accomplish the
termination and return of trust assets. If Xxxxxxxx fails to execute the
foregoing documents within forty eight (48) hours after receipt of a written
request from the Company, the Company can suspend the payment of the Severance
Payments until
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Xxxxxxxx executes said documents. Notwithstanding the foregoing, this shall not
release or limit Xxxxxxxx'x rights to indemnification under the terms of the
By-Laws of the Company and under the Indemnification Agreement between Xxxxxxxx
and the Company dated as of December 10, 1998, as in effect on the date hereof.
18. Nature of Agreement. Xxxxxxxx and the Company acknowledge and agree
that this Severance Agreement is a severance and settlement agreement and shall
not constitute an admission of liability and wrongdoing on the part of either
party.
19. Notices. All notices, requests, demands, and other communications
provided for by this Severance Agreement shall be sufficient if in writing and
delivered in person or sent by registered or certified mail, postage prepaid, to
the other party at the address first above written, or at such other address as
to which the party gives notice, with a copy to:
For the Company: Designs, Inc.
00 X Xxxxxx
Xxxxxxx, XX 00000
Attn: Corporate Counsel
and
Xxxxx Xxxxx, Esq.
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-00000
For Xxxxxxxx: Xxxxx X. Xxxxxxx
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Copies of all Notices must be delivered or sent in the same manner that
they are sent or delivered to the parties hereto.
20. Entire Agreement. This Severance Agreement is the entire agreement
between the parties relating to the subject matter hereof. The Employment
Agreement shall terminate effective upon the signing of this Severance
Agreement, at which time it shall become null and void.
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21. Voluntary Assent. Xxxxxxxx and the Company affirm that no other
promises or agreements of any kind have been made to or with them by any person
or entity whatsoever to cause them to sign the Severance Agreement, and that
they fully understand the meaning and intent of this Severance Agreement.
Xxxxxxxx and the Company state and represent that they have had an opportunity
to fully discuss and review the terms of this Severance Agreement with an
attorney, that they have read this Severance Agreement carefully and understand
the contents hereof, that they freely and voluntarily assent to all of the terms
and conditions hereof and that they sign their name of their own free act.
22. Binding Effect. This Severance Agreement shall inure to the benefit
of and be binding upon the Company and Xxxxxxxx, their respective successors,
executors, administrators, heirs and permitted assigns.
23. Amendment. This Severance Agreement may be amended or modified only
by a written instrument signed by Xxxxxxxx and a duly authorized representative
of the Company.
24. Severability. In case any provisions of this Severance Agreement
shall be determined by an arbitrator or court of competent jurisdiction to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Severance Agreement shall not in any way be
affected or impaired thereby.
25. Future Cooperation. At any time after execution and exchange of this
Severance Agreement and from time to time, Xxxxxxxx and the Company, upon
written request from either party to the other, shall execute and deliver such
further documents or instruments as may be reasonably necessary to more fully
effectuate the intention of the parties hereto but limited to such
amplification, definition or effectuation strictly consistent with the terms and
provisions hereof.
26. Applicable Law. This Severance Agreement shall be governed by the
laws of the Commonwealth of Massachusetts.
27. Opportunity to Consider; Revoke. Xxxxxxxx acknowledges that he has
been afforded an opportunity to take at least twenty-one (21) days to consider
this Severance Agreement and has been advised to consult with the attorneys of
his choice prior to executing this Severance Agreement. Xxxxxxxx acknowledges
that he has had an
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adequate opportunity to review this Severance Agreement before its execution.
The parties understand and acknowledge that Xxxxxxxx will have a period of seven
(7) calendar days following his execution of this Severance Agreement in which
to revoke his consent to this Severance Agreement. Such revocation must be in
writing and shall be transmitted to the Company such that it is actually
received prior to the expiration of the seven-day revocation period.
28. Counterparts. This Severance Agreement may be executed in two (2)
signature counterparts, each of which shall constitute an original, but all of
which taken together shall constitute one and the same instrument.
Executed as a sealed instrument this 15 day of January, 2000.
DESIGNS, INC.
By:/s/ Xxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxxx
Its: Chief Executive Officer Xxxx X. Xxxxxxxx
Hereunto duly authorized
By:Xxxxxxx X. Xxxxx
Its: Vice President of Corporate Development
Hereunto duly authorized
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Xxxx Xxxxxxxx Xxxxxxxxx Payment Schedule
Insurance
Payment Deduction BI-Weekly Payment
7-Jan 2000 $11,195.10 $0.00 $11,195.10
7-Jan 2000 $25,000.00 $ 266.37 $ 24,733.63
21-Jan 2000 $11,195.10 $ 266.37 $ 10,928.73
4-Feb 2000 $11,195.05 $ 474.79 $ 10,720.26
18-Feb 2000 $11,195.05 $ 450.00 $ 10,745.05
3-Mar 2000 $11,195.05 $ 474.79 $ 10,720.26
17-Mar 2000 $11,195.05 $ 450.00 $ 10,745.05
31-Mar 2000 $11,195.05 $ 266.37 $ 10,928.68
14-Apr 2000 $11,195.05 $ 474.90 $ 10,720.15
28-Apr 2000 $11,195.05 $ 450.00 $ 10,745.05
12-May 2000 $11,195.05 $ 474.90 $ 10,720.15
26-May 2000 $11,195.05 $ 450.00 $ 10,745.05
9-Jun 2000 $11,195.05 $ 266.37 $ 10,928.68
23-Jun 2000 $11,195.05 $ 11,195.05
7-Jul 2000 $11,195.05 $ 11,195.05
21-Jul 2000 $11,195.05 $ 11,195.05
4-Aug 2000 $11,195.05 $ 11,195.05
18-Aug 2000 $11,195.05 $ 11,195.05
1-Sep 2000 $11,195.05 $ 11,195.05
15-Sep 2000 $11,195.05 $ 11,195.05
29-Sep 2000 $11,195.05 $ 11,195.05
13-Oct 2000 $11,195.05 $ 11,195.05
27-Oct 2000 $11,195.05 $ 11,195.05
10-Nov 2000 $11,195.05 $ 11,195.05
24-Nov 2000 $11,195.05 $ 11,195.05
8-Dec 2000 $11,195.05 $ 11,195.05
22-Dec 2000 $11,195.05 $ 11,195.05
5-Jan 2001 $11,195.05 $ 11,195.05
19-Jan 2001 $11,195.05 $ 11,195.05
2-Feb 2001 $11,195.05 $ 11,195.05
16-Feb 2001 $11,195.05 $ 11,195.05
2-Mar 2001 $11,195.05 $ 11,195.05
16-Mar 2001 $11,195.05 $ 11,195.05
30-Mar 2001 $11,195.05 $ 11,195.05
13-Apr 2001 $11,195.05 $ 11,195.05
27-Apr 2001 $11,195.05 $ 11,195.05
11-May 2001 $11,195.05 $ 11,195.05
25-May 2001 $11,195.05 $ 11,195.05
8-Jun 2001 $11,195.05 $ 11,195.05
22-Jun 2001 $11,195.05 $ 11,195.05
6-Jul 2001 $11,195.05 $ 11,195.05
20-Jul 2001 $11,195.05 $ 11,195.05
3-Aug 2001 $11,195.05 $ 11,195.05
17-Aug 2001 $11,195.05 $ 11,195.05
31-Aug 2001 $11,195.05 $ 11,195.05
14-Sep 2001 $11,195.05 $ 11,195.05
28-Sep 2001 $11,195.05 $ 11,195.05
12-Oct 2001 $11,195.05 $ 11,195.05
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26-Oct 2001 $11,195.05 $ 11,195.05
9-Nov 2001 $11,195.05 $ 11,195.05
23-Nov 2001 $11,195.05 $ 11,195.05
Total $573,557.50 $ 4,764.86 $ 568,792.64
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