Execution Copy
EMPLOYMENT AGREEMENT
AGREEMENT, made the 4th day of June, 1997, between SASSCO FASHIONS,
LTD., a Delaware corporation, with its principal office at 00 Xxxxx Xxx,
Xxxxxxxx, XX (the "Corporation"), and XXXXXX X. XXXXXX, residing at 00 Xxxxxxxxx
Xxxx, Xxx Xxxxxxxxxx, X.X. 00000 (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is the chief executive officer of the Sassco
Division of The Xxxxxx Xxx Companies, Inc. (the "Division"), the predecessor to
the Corporation; and
WHEREAS, the Corporation desires to secure the continued services of
the Executive, and the Executive desires to continue to furnish services to the
Corporation, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, the parties hereto hereby agree as follows:
1. Employment. The Corporation shall employ the Executive, and the
Executive shall serve the Corporation, upon the terms and conditions hereinafter
set forth.
2. Term. Subject to the terms and conditions hereinafter set forth, the
term of the Executive's employment hereunder shall commence on June 4, 1997 (the
"Effective Date") and shall continue until the fifth anniversary of the
Effective Date, unless earlier terminated pursuant to the Sections 7, 8 or 9
(the "Term").
3. Duties and Extent of Services.
(a) Chief Executive Officer. During the Term, the Executive
shall serve as Chief Executive Officer of the Corporation faithfully and to the
best of his ability, and shall devote substantially all of his business time,
energy and skill to such employment, it being understood and agreed that the
Executive may serve on the boards of directors or equivalent governing bodies of
other business corporations or other business organizations, provided that (i)
such other corporations or other organizations are not in direct competition
with the Corporation and/or its subsidiaries and (ii) such service does not
materially interfere with the performance by the Executive of his duties
hereunder. The Executive shall be invested with the duties and authority that
are customarily delegated to a chief executive officer of a corporation, and
shall report to and be subject to the direction of the Board of Directors of the
Corporation, it being understood that the day-to-day operations of the
Corporation shall be within the purview of the Executive as Chief Executive
Officer of the Corporation, to the maximum extent consistent with the standards
for comparable public companies in the Corporation's industry. The Executive
shall also perform such specific duties and
services of a senior executive nature as the Board of Directors of the
Corporation shall request, including, without limitation, serving as a senior
officer and/or director of any of the Corporation's subsidiaries.
(b) Board Membership. Although it is understood that the
right to elect directors of the Corporation is by law vested in the stockholders
of the Corporation, it is nevertheless mutually contemplated that the Board of
Directors of the Corporation (the "Board") shall consist of seven persons, and
that during the Term (i) the stockholders of the Corporation will elect the
Executive and a designee of the Executive to the Board, (ii) the executive shall
serve as Chairman of the Board and of the Executive Committee of the Board (if
any) and (iii) the Executive shall have the right to designate one observer to
the Board, which observer shall be entitled to receive notice of, and attend
meetings of, the Board, but shall not have the right to vote at such meetings.
4. Base Salary. During the Term, the Corporation shall pay the
Executive a base salary ("Base Salary") of Two Million United States Dollars
(U.S. $2,000,000) per annum, or such higher amount as the Board may from time to
time determine, payable in equal weekly installments.
5. Incentive Compensation.
(a) 1998 Fiscal Year. If the Corporation's EBITDA (as
hereinafter defined) for the fiscal year ended closest to December 31, 1998 (the
"1998 Fiscal Year") is at least (i) Thirty-Three Million Eight Hundred Thousand
United States Dollars (U.S. $33,800,000) minus (ii) to the extent that the same
reduces EBITDA, the aggregate compensation expense charged to 1998 Fiscal Year
earnings for (A) fees and expenses paid to nonmanagement members of the Board
and (B) the grant or exercise of stock options issued to management of the
Corporation or to nonmanagement members of the Board (the "1998 EBITDA Target"),
the Corporation shall pay a bonus to the Executive no later that 120 days after
the end of the 1998 Fiscal Year, in an amount equal to the sum of (x) Five
Hundred Thousand United States Dollars (U.S. $500,000) plus (y) 50% of the
Corporation's EBITDA for such fiscal year in excess of the 1998 EBITDA Target,
provided that (aa) in no event shall such bonus exceed Xxx Xxxxxxx Xxxx Xxxxxxx
Xxxxxxxx Xxxxxx Xxxxxx Dollars (U.S. $1,500,000) and (bb) in the event that the
Corporation's EBITDA for the 1998 Fiscal Year is less than the 1998 EBITDA
Target plus Xxx Xxxxxxx Xxxx Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxx Dollars (U.S.
$2,500,000), the Corporation shall defer payment of Five Hundred Thousand United
States Dollars (U.S. $500,000) of such bonus and pay the same to the Executive
no later than 120 days after the end of the first fiscal year following the 1998
Fiscal Year in which the Corporation's EBITDA is at least equal to the 1998
EBITDA Target plus Xxx Xxxxxxx Xxxx Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxx Dollars (U.S.
$2,500,000).
(b) 1999 Fiscal Year and thereafter. If the Corporation's
EBITDA exceeds 85% (the "Minimum Percentage") of the Corporation's Budgeted
EBITDA (as hereinafter defined) for any fiscal year (after the 1998 Fiscal Year)
during the Term, the Corporation shall pay a bonus to the Executive no later
than 120 days after the end of such fiscal year, in an amount equal to Xxx
Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxx Dollars (U.S. $100,000) or portion thereof for
each percentage point or portion thereof of such Budgeted EBITDA by which such
EBITDA exceeds the Minimum
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Percentage, provided that in no event shall such bonus exceed Xxx Xxxxxxx Xxxx
Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxx Dollars (U.S. $1,500,000).
(c) Certain Definitions. "EBITDA" means, for any fiscal year
of the Corporation, the consolidated earnings before interest, taxes,
depreciation and amortization of the Corporation and its subsidiaries, as
determined pursuant to generally accepted accounting principles in effect in the
United States of America from time to time.
"Budgeted EBITDA" for any fiscal year shall be the single EBITDA target
for such fiscal year contained in the operating budget established by the Board
in good faith for the Corporation as a whole; provided, however, that if the
following amounts have not been deducted from projected earnings in determining
such EBITDA target, such amounts shall be deducted from such EBITDA target for
purposes of determining Budgeted EBITDA, but only to the extent the same would
reduce actual EBITDA: (i) the aggregate compensation expense charged to earnings
during such fiscal year for fees paid to non-management members of the Board,
and (ii) up to Two Hundred Thousand United States Dollars (U.S. $200,000) in
rental payments for the Corporation's lease of offices at 1412 Broadway, New
York, New York.
6. Employee Benefits.
(a) During the Term, the Executive shall receive coverage
and/or benefits under any and all medical insurance, life insurance, long-term
disability insurance and pension plans and other employee benefit plans of the
Corporation generally made available to senior executives of the Corporation
from time to time.
(b) During the Term, the Corporation shall provide (x) the
Executive and members of his immediate family with (i) supplemental disability
coverage and (ii) medical insurance for all medical costs and services incurred
by the foregoing, including costs of dental, vision and custodial care, and (y)
the Executive with the services of an automobile selected by him and a driver
for his use, all of the foregoing coverages and benefits to be substantially
equivalent to those currently provided to the Executive by the Division.
(c) The Executive shall be entitled to paid vacations (taken
consecutively or in segments), in accordance with the standard vacation policy
of the Corporation for senior executives, but in no event less than five weeks
each calendar year during the Term.
Such vacations shall be taken at times consistent with the effective
discharge of the Executive's duties.
(d) During the Term, the Executive shall be accorded office
facilities and secretarial assistance commensurate with his position as Chief
Executive Officer of the Corporation and adequate for the performance of his
duties hereunder.
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7. Termination - Death or Disability.
(a) In the event of the termination of the Executive's
employment because of the death of the Executive during the Term, the
Corporation shall pay to any one or more beneficiaries designated by the
Executive pursuant to notice to the Corporation, or, failing such designation,
to the Executive's estate, (i) the unpaid Base Salary owing to the Employee
through the end of the month of his death, in a lump sum within five business
days after his death, and (ii) a bonus for the year in which such termination
occurs, equal to the bonus (if any) that would have been paid for such year if
no such termination had occurred, times a fraction, the numerator of which is
the number of months in such year through the end of the month in which such
termination occurs, and the denominator of which is twelve (such bonus to be
computed and paid at the time and in the manner specified in Section 5).
(b) In the event that Executive shall become Disabled (as
hereinafter defined), the Corporation shall have the right to terminate the
Executive's employment hereunder by giving him written notice of such
termination. Upon receipt of such notice, the Executive's employment hereunder
shall terminate. In the event of such termination, the Corporation shall pay to
the Executive (i) the unpaid Base Salary owing to the Executive through the end
of the month of such termination, in a lump sum within five business days of
such termination, and (ii) a bonus for the year in which such termination
occurs, equal to the bonus (if any) that would have been paid for such year if
no such termination had occurred, times a fraction, the numerator of which is
the number of months in such year through the end of the month in which such
termination occurs, and the denominator of which is twelve (such bonus to be
computed and paid at the time and in the manner specified in Section 5). For the
purposes hereof, "Disabled" shall mean, with respect to the Executive, being
physically or mentally disabled, whether totally or partially, so that he is
substantially unable to perform his services hereunder for a consecutive period
of more than six months or for shorter periods aggregating six months during any
twelve-month period.
8. Termination for Cause by Corporation.
(a) The Executive's employment hereunder may be terminated by
the Corporation for Cause (as defined in Section 8(b)) upon compliance with the
provisions of Section 8(c). In the event that Executive's employment hereunder
shall validly be terminated by the Corporation for Cause pursuant to this
Section 8(a), the Corporation shall promptly pay accrued but unpaid Base Salary
and reimburse or pay any other accrued but unpaid amounts due under Sections 6
and 12 hereof as of the date of termination, and thereafter shall have no
further obligations under this Agreement, provided that if the Executive's
employment is terminated by the Corporation for cause by reason of Section
8(b)(iii), the Corporation shall also pay the Executive his bonus (if any) that
would have been paid for the fiscal year in which such termination occurs, as if
no such termination had occurred (such bonus to be computed and paid at the time
and in the manner specified in Section 5).
Upon termination of the Executive's employment hereunder for
Cause, the Executive shall nonetheless remain bound by the obligations provided
for in Sections 10 and 11 hereof.
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(b) For the purposes hereof, "Cause" shall mean (i) conviction
by the Executive of a felony, (ii) perpetration by the Executive of (x) an
illegal act which causes significant economic injury to the Corporation or (y) a
common law fraud against the Corporation, or (iii) willful violation by the
Executive of a specific written direction from the Corporation's Board of
Directors concerning one or more matters material to the Corporation's business
and not within the Executive's purview as set forth in the penultimate sentence
of Section 3(a) ("Material Insubordination").
(c) Termination for Cause shall be effected only by action of
a majority of the Directors of the Corporation then in office (excluding the
Executive) at a meeting duly called and held upon at least ten days' prior
written notice to the Executive specifying the particulars of the action or
inaction alleged to constitute "Cause" (and at which meeting the Executive and
his counsel were entitled to be present and given reasonable opportunity to be
heard). In the event of a dispute between the Executive and the Corporation as
to whether Material Insubordination has occurred, such dispute shall be subject
to arbitration in accordance with Section 23.
9. Termination for Good Reason by the Executive; Severance Payment.
(a) The Executive's employment hereunder may be terminated by
the Executive for Good Reason (as hereinafter defined) by providing written
notice to the Corporation to such effect (such termination to be effective on
the date specified in such notice, which date shall not be more than sixty (60)
days nor less than thirty (30) days after date of such notice).
(b) For the purposes hereof, "Good Reason" means the
continuation of any of the following events for more than ten (10) days after
the Corporation's receipt from the Executive of written notice thereof:
(i) the Executive shall fail to be re-elected as a
Director of the Corporation and as Chairman of the Board and Chairman of the
Executive Committee of the Board (if any) or shall be removed from any such
positions or from the position of Chief Executive Officer at any time during the
Term hereof (other than fr Cause), any designee or observer of the Executive
pursuant to Section 3(b) shall fail to be re-elected or shall be removed as a
Director or observer during the Term, or the size of the Board of Directors
shall be expanded and the Executive shall not be given reasonable opportunity to
designate one or more additional Directors such that the Executive and all
Directors designated by the Executive shall comprise at least 28% of the
membership of the Board;
(ii) the Executive shall fail to be vested with the
powers and authority of Chief Executive Officer of the Corporation as described
in Section 3(a), or the powers and authority of such position or his
responsibilities with respect thereto shall be diminished in any material
respect;
(iii) the Executive shall have assigned to him
without his express written consent any duties, functions, authority or
responsibilities that are inconsistent with the Executive's positions described
in Section 3;
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(iv) the Executive's principal place of employment is
changed to a location more than twenty-five miles from the prior location
without the Executive's prior written consent;
(v) any material failure by the Corporation to
fulfill any of its obligations under this Agreement, including, without
limitation, the failure to make any material payment required to be made by the
Corporation pursuant to Section 4 or 5 within five (5) business days after the
date such payment is required to be made;
(vi) any purported termination by the Corporation of
the Executive's employment otherwise than as expressly permitted by, and in
compliance with all conditions and procedures of, this Agreement;
(vii) the Corporation shall fail to comply with the
provisions of Section 13 or 18(a);
(viii) there shall occur a Change of Control (as
defined in the Indenture dated as of June 4, 1997 (the "Indenture") among the
Corporation and IBJ Xxxxxxxx Bank & Trust Company, as Trustee), other than a
Change of Control in connection with, or resulting in whole or part from, the
acquisition by the Executive or any Affiliate (as defined in the Indenture) of
the Executive of "beneficial ownership" (as defined in Rule 13d-3 of the
Securities Exchange Act of 1934, as amended), directly or indirectly, of shares
of capital stock of the Corporation;
(ix) without the Executive's consent, (i) the
Corporation shall sell substantially all of its assets to, or merge or
consolidate with, any other person or entity (other than a subsidiary of the
Corporation) or (ii) the Corporation's charter or bylaws shall be materially
amended; or
(x) the shareholders of the Corporation shall fail to
approve, at or before the earlier of the Corporation's first annual meeting of
shareholders following the Effective Date and June 15, 1998, the Sassco Fashions
Ltd. 1997 Stock Option Plan in the form adopted by the Board, to the extent that
such approval is required pursuant to Section 1 of the form of Stock Option
Agreement attached as Annex A to Schedule I of such Stock Option Plan.
(c) If at any time (i) the Executive terminates his employment
for Good Reason (other than on the grounds of Section 8(b)(viii)) or (ii) the
Corporation terminates the Executive's employment without Cause, then the
Corporation shall pay to the Executive, in lieu of any other amounts that might
otherwise have been payable hereunder (other than pursuant to Sections 6 and
12), an amount (the "Severance Amount") equal to the discounted present value as
of the date of termination (using a discount factor of 10% per annum) of the
aggregate amount which would have been payable to the Executive had he continued
to be employed by the Corporation as Base Salary through the end of the Term (at
the rate in effect as of the date of termination), which amount shall be payable
within ten days following such termination, provided that if the Executive
terminates his employment for Good Reason solely on the grounds of Section
8(b)(viii), then the Corporation shall pay to the Executive within ten days
following such termination, in lieu of any other amounts that might otherwise
have been payable hereunder (other than pursuant to Sections 6 and 12), 57% of
the Severance Amount.
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10. Confidential Information. In addition to any other confidentiality
obligation the Executive may have to the Corporation, from and after the date
hereof the Executive shall keep secret and retain in strictest confidence, and
shall not use for his benefit or the benefit of others, any and all confidential
information relating to the Corporation and its subsidiaries, including, without
limitation, customer lists, financial plans or projections, pricing policies,
marketing plans or strategies, business acquisition or divestiture plans, new
personnel acquisition plans, designs, and, except in connection with the
performance of his duties hereunder, he shall not disclose any such information
to anyone outside the Corporation and any of its subsidiaries, except as
required by law (provided prior written notice thereof is given by the Executive
to the Corporation) or except with the Corporation's prior written consent,
unless such information is known generally to the public or the trade through
sources other than the Executive's unauthorized disclosure.
11. Competitive Activity. The Executive acknowledges that the
Corporation and its subsidiaries do business in many places in the world, and
that the knowledge and relationships of the Executive with, among others,
customers and suppliers to the Corporation and its subsidiaries are an important
asset of the Corporation. Accordingly, the Executive agrees that during his
employment hereunder, and, following a termination of his employment other than
termination by the Executive for Good Reason or by the Corporation without
Cause, for the balance (if any) of the original Term, the Executive shall not,
without the prior consent of the Board (i) directly or indirectly, engage or be
interested in (as owner, partner, shareholder, employee, director, officer,
agent, consultant or otherwise), with or without compensation, any business
wherever located in the world engaged in the manufacture, distribution, design
marketing or sale of women's apparel or (ii) induce or attempt to persuade any
employee of the Corporation or of any subsidiary of the Corporation, or any
person who was employed by the Corporation or any subsidiary of the Corporation
within the preceding six months, to leave the employ of the Corporation or any
subsidiary of the Corporation (but the foregoing shall not be deemed to prevent
the Executive in his capacity as Chief Executive Officer of the Corporation from
hiring or dismissing any employee of the Corporation or any subsidiary for the
benefit of the Corporation).
Nothing in this Section shall prohibit the Executive from acquiring or
holding not more than five percent of any class of publicly traded securities of
any business.
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12. Expenses.
(a) The Corporation shall reimburse the Executive for all
reasonable, ordinary and necessary expenses incurred by the Executive in the
performance of the Executive's duties hereunder; provided, however, that the
Executive accounts to the Corporation for such expenses in the manner
customarily prescribed by the Corporation for its senior executives.
(b) Promptly following the Effective Date, the Corporation
shall pay the Executive $200,000 as a liquidated payment to cover the reasonable
legal and other fees and expenses incurred by the Executive in connection with
the negotiation, execution and delivery of this Agreement and other prior
matters concerning the Corporation.
13. Directors' and Officers' Insurance; Indemnification. Within 30 days
after the execution and delivery hereof, the Executive shall be provided with
directors' and officers' insurance in connection with his employment hereunder
and service as a director as contemplated hereby with such coverage (including
with respect to unpaid wages and taxes not remitted when done) as shall be
reasonably satisfactory to the Executive and with aggregate limits of liability
for all covered officers and directors of not less than $10,000,000, and the
Corporation shall maintain such insurance in effect for the period of the
Executive's employment hereunder and for not less than five years thereafter;
provided, however, that in the event that the Corporation shall not obtain such
insurance, it shall provide or cause the Executive to be provided with indemnity
(or a combination of indemnity and directors' and officers' insurance) in
connection with his employment hereunder with substantially equivalent coverage
and amounts, and the Corporation shall maintain such indemnity (or combination
of indemnity and directors' and officers' insurance) or cause such indemnity (or
such combination) to be maintained for the period of the Executive's employment
hereunder and for not less than five years thereafter.
14. No Duty to Mitigate. The Executive shall have no duty to mitigate
the Severance Amount or any other amounts payable to him hereunder and such
amounts shall not be subject to reduction for any compensation received by the
Executive from employment in any capacity or other source following the
termination of Executive's employment with the Corporation and its subsidiaries.
15. Prior Agreements; Amendments; No Waiver. This Agreement contains
the entire understanding between the parties hereto with respect to the subject
matter hereof. This Agreement may not be changed orally, but only by an
instrument in writing signed by the party against whom enforcement of any
waiver, change, modification, extension or discharge is sought. No failure on
the part of either party to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any partial exercise of
any right hereunder preclude any further exercise thereof.
16. Survival of Provisions. The provisions of Sections 10 and 11 shall
survive the termination or expiration of this Agreement as provided therein.
Such provisions are unique and extraordinary, which give them a value peculiar
to the Corporation, and cannot be reasonably or adequately
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compensated in damages for its loss. Accordingly, any breach by the Executive of
such provisions will cause the Corporation irreparable injury and damage.
Therefore, the Corporation, in addition to all other remedies available to i,
shall be entitled to injunctive and other available equitable relief in any
court of competent jurisdiction to prevent or otherwise restrain a breach of
such provisions for the purposes of enforcing such provisions.
17. Withholding. The Corporation shall be entitled to withhold from any
and all amounts payable to the Executive hereunder such amounts as may from time
to time be required to be withheld pursuant to applicable tax laws and
regulations.
18. Succession, Assignability and Binding Effect.
(a) The Corporation will require any successor or successors
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Corporation
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that the Corporation would be required to perform it if no
such succession had taken place. Failure of the Corporation to obtain such
agreement prior to the effectiveness of any such succession shall constitute
"Good Reason" for resignation by the Executive.
(b) This Agreement shall inure to the benefit of and shall be
binding upon the Corporation and its successors and permitted assigns and upon
the Executive and his heirs, executors, legal representatives, successors and
permitted assigns. However, without prejudice to the rights of the Corporation
under Section 18(a), neither party may assign, transfer, pledge, encumber,
hypothecate or otherwise dispose of this Agreement or any of its or his rights
hereunder without the prior written consent of the other party, and any such
attempted assignment, transfer, pledge, encumbrance, hypothecation or other
disposition without such consent shall be null and void and without effect.
19. Headings. The paragraph headings contained herein are included
solely for convenience of reference and shall not control or affect the meaning
or interpretation of any of the provisions of this Agreement.
20. Notices. Any notices or other communications hereunder by either
party shall be in writing and shall be deemed to have been duly given if
delivered personally to the other party or, if sent by registered or certified
mail, upon receipt, to the other party at his or its address set forth at the
beginning of this Agreement or at such other address as such other party may
designate in conformity with the foregoing.
21. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York applicable to
contracts made and to be performed wholly in that state, without giving effect
to the principles thereof relating to the conflict of laws.
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22. Legal Fees and Expenses. In order to induce the Executive to enter
into this Agreement and to provide the Executive with reasonable assurance that
the purposes of this Agreement will not be frustrated by the cost of its
enforcement, the Corporation shall pay and be solely responsible for any
attorneys' fees and expenses and court costs incurred by the Executive as a
result of the failure by the Corporation to perform this Agreement or any
provision hereof to be performed by it or in connection with any action which
may be brought, by or in the name or for the benefit of the Corporation or any
subsidiary contesting the validity or enforceability of this Agreement or any
provision hereof to be performed by the Corporation, which action shall have
been dismissed by a final, non-appealable court order.
23. Arbitration.
(a) Disputes Subject to Arbitration. In the event that the
Corporation terminates the Executive's employment on the grounds set forth in
Section 8(b)(iii), the Corporation and the Executive mutually consent to the
resolution by arbitration of any dispute between the Corporation and the
Executive as to whether Material Insubordination has occurred (a "Dispute").
Unless the Corporation and the Executive otherwise agree, no other disputes,
issues, claims or controversies arising out of the Executive's employment (or
its termination), or any other matter whatsoever, shall be submitted to or
resolved by arbitration.
(b) Arbitration Procedures. (i) The Corporation and the
Executive agree that, except as provided in this Agreement, any arbitration
shall be in accordance with the then current National Rules for the Resolution
of Employment Disputes Model Employment Arbitration Procedures of the American
Arbitration Association ("AAA") before an arbitrator who is licensed to practice
law in the state in which the arbitration is convened (the "Arbitrator"). The
arbitration shall take place in or near the city in the Executive is or was last
employed by the Corporation.
(ii) The Arbitrator shall be selected as follows. The
AAA shall give each party a list of 11 arbitrators drawn from its panel of labor
and employment arbitrators.
Each side may strike all names on the list it deems
unacceptable. If only one common name remains on the lists of all parties said
individual shall be designated as the Arbitrator. If more than one common name
remains on the lists of all parties, the parties shall strike names
alternatively until only one remains. If no common name remains on the lists of
all parties, the AAA shall furnish an additional list and the parties shall
alternate striking names on such second list until an arbitrator is selected.
(iii) The Arbitrator shall apply the law of the state
of New York applicable to contracts made and to be performed wholly in that
state (without giving effect to the principles thereof relating to conflicts of
law). The Federal Rules of Evidence shall apply. The Arbitrator, and not any
federal, state, or local court or agency, shall have exclusive authority to
resolve any dispute relating to the interpretation, applicability or formation
of the term "Material Insubordination". The Arbitrator shall render a decision
within thirty days of the date upon which the Arbitrator is selected pursuant to
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Section 23(b)(ii), which decision shall be final and binding upon the parties.
In the event that the Arbitrator decides that Material Insubordination has (x)
occurred, then the Executive's employment shall be deemed to have been
terminated for Cause pursuant to Section 8(a) or (y) not occurred, then the
Executive's employment shall be deemed to have been terminated without Cause
pursuant to Section 9(c).
(iv) The Arbitrator shall have jurisdiction to hear
and rule on pre-hearing disputes and is authorized to hold pre-hearing
conferences by telephone or in person as the Arbitrator deems necessary. The
Arbitrator shall have the authority to entertain a motion to dismiss and/or a
motion for summary judgment by any party and shall apply the standards governing
such notions under the Federal Rules of Civil Procedure.
(v) Either party, at its expense, may arrange for and
pay the costs of a court reporter to provide a stenographic report of
proceedings.
(vi) Either party, upon request at the close of
hearing, shall be given leave to file a post-hearing brief. The time for filing
such a brief shall be set by the Arbitrator.
(vii) Either party may bring an action in any court
of competent jurisdiction to compel arbitration under this Section 23. Except as
otherwise provided in this Section 23, both the Corporation and the Executive
agree that neither such party shall initiate or prosecute any lawsuit or
administrative action in any way related to any Dispute covered by this Section
23.
(viii) The arbitrator shall render an opinion in the
form typically rendered in labor arbitrations.
(c) Arbitration Fees and Costs. The Corporation and the
Executive shall equally share the fees and costs of the Arbitrator. Each party
will deposit funds or post other appropriate security for its share of the
Arbitrator's fee, in an amount and manner determined by the Arbitrator, ten (10)
days before the first day of hearing. Each party shall pay for its own costs and
attorneys' fees, if any. However, if any party prevails on a statutory claim
that affords the prevailing party attorneys' fees, the Arbitrator may award
reasonable fees to the prevailing party.
(d) Opportunity to Review. The Executive acknowledge that he
has been given the opportunity to discuss this Agreement, including this Section
23, with his private legal counsel and has availed himself of that opportunity
to the extent he wishes to do so.
(e) Law Governing. The parties agree that the arbitration
provisions set forth in this Section 23 will be governed by the Federal
Arbitration Act, 9 U.S.C. 1-16, ("FAA"). The parties further agree that all
Disputes, whether arising under state or federal law, will be subject to the
FAA, notwithstanding any state or local laws to the contrary.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the day and year first above written.
SASSCO FASHIONS, LTD.
By:
---------------------------
Name:
Title
/s/ XXXXXX X. XXXXXX
-------------------------------
XXXXXX X. XXXXXX
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