EXHIBIT 10.05
TERMINATION AGREEMENT
TERMINATION AGREEMENT effective as of January 1, 1999
between SWANK, INC., a Delaware corporation having its principal
office at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the "Company"), and
_________________________, residing at _____________________,
___________________________________ ("Employee").
W I T N E S S E T H:
WHEREAS, in consideration of the contribution that has
been, and can continue to be, made by Employee toward the success
of the business of the Company, the Company desires to enter into
this Agreement with Employee; and
WHEREAS, Employee desires to enter into this Agreement
with the Company.
NOW, THEREFORE, in consideration of the mutual
covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Employee hereby agree as follows:
1. Term and Operation of Agreement. This Agreement
shall be effective for a term (the "Term") commencing as of
January 1, 1999 and ending on the earlier of (i) December 31,
2001 (subject to extension as provided below) and (ii) the
termination of Employee's employment prior to a Change in Control
(as hereinafter defined) of the Company; provided, however, that
(x) prior to a Change in Control, the December 31, 2001
expiration date set forth in clause (i) above shall be
automatically extended on each December 31 during the Term,
commencing on December 31, 2001, until the next December 31
unless the Company shall have given the Employee not less than 30
days' written notice prior to the then current December 31
expiration date that there shall be no extension (in which event
the expiration date set forth in such clause (i), as theretofore
extended, shall not thereafter be further extended) and (y)
notwithstanding the foregoing, if there is a Change in Control
subsequent to December 31, 1998, but prior to the termination of
this Agreement in accordance with the foregoing, then the Term
shall be automatically be fixed as a two-year term commencing on
the date such Change in Control shall have occurred and ending on
the second anniversary of the date of such Change in Control.
For purposes of this Agreement, Employee's employment
by the Company shall be deemed to be continuing (i) for any
period during which, in accordance with any contract between him
and the Company ("Employment Agreement"), provision shall be made
for Employee to perform services as an employee of the Company
and Employee shall be entitled to compensation from the Company
for same, or (ii) if there is no Employment Agreement, for any
period during which Employee is in fact performing services as an
employee of the Company and receiving compensation from the
Company for same.
Anything in this Agreement to the contrary
notwithstanding, except as expressly set forth herein, neither
this Agreement nor any provision hereof shall be operative until
a Change in Control has occurred, at which time this Agreement
and all of its provisions shall become operative immediately.
2. Change in Control-Termination of Employment and
Compensation in Event of Termination.
(a) After a Change in Control has occurred, Employee may
terminate his employment within two years thereafter upon the
occurrence of any of the following events:
(i) Failure to elect or appoint, or re-elect or reappoint,
Employee to, or removal of Employee from, his office and/or
position with the Company as constituted immediately prior to the
Change in Control, except in connection with the termination of
Employee's employment pursuant to subparagraph 3(a) hereof.
(ii) A reduction in Employee's overall compensation
(including any reduction in pension or other benefit programs or
perquisites) or a significant change in the nature or scope of
the authorities, powers, functions or duties normally attached to
Employee's position with the Company as referred to in clause (i)
of subparagraph 2(a) hereof.
(iii) A determination by Employee made in good faith
that, as a result of a Change in Control, he is unable effectively to
carry out the authorities, powers, functions or duties attached
to his position with the Company as referred to in clause (i) of
subparagraph 2 (a) hereof, and the situation is not remedied
within thirty (30) calendar days after receipt by the Company of
written notice from Employee of such determination.
(iv) A breach by the Company of any provision of this
Agreement not covered by clauses (i), (ii) or (iii) of this subparagraph
2(a), which is not remedied within thirty (30) calendar days
after receipt by the Company of written notice from Employee of
such breach.
(v) A change in the location at which substantially all of
Employee's duties with the Company are to be performed to a
location which is not within a 20-mile radius of the address of
the place where Employee is performing services immediately prior
to the Change in Control.
(vi) A failure by the Company to obtain the assumption of,
and the agreement to perform, this Agreement by any successor (within
the meaning of paragraph 8).
An election by Employee to terminate his employment
under the provisions of this subparagraph 2(a) shall not be
deemed a voluntary termination of employment by Employee for the
purpose of interpreting the provisions of any of the Company's
employee benefit plans, programs or policies. Employee's right
to terminate his employment for good reason shall not be affected
by his illness or incapacity, whether physical or mental, unless
the Company shall at the time be entitled to terminate his
employment under paragraph 3(a)(ii) of this Agreement.
Employee's continued employment with the Company for any period
of time less than two years after a Change in Control shall not
be considered a waiver of any right he may have to terminate his
employment pursuant to this paragraph 2(a).
(b) After a Change in Control has occurred, if Employee
terminates his employment with the Company pursuant to
subparagraph 2(a) hereof or if Employee's employment is
terminated by the Company for any reason other than pursuant to
paragraph 3(a) hereof, Employee (i) shall be entitled to his
salary, bonuses, awards, perquisites and benefits, including,
without limitation, benefits and awards under the Company's stock
option plans and the Company's pension and retirement plans and
programs, through the Termination Date (as hereafter defined)
and, in addition thereto, (ii) shall be entitled to be paid in a
lump-sum, on the Termination Date, an amount of cash (to be
computed, at the expense of the Company, by
PricewaterhouseCoopers, independent certified public accountants
to the Company, or such other independent certified accountants
regularly employed by the Company (the "Accountants") in charge
of the Company's account immediately prior to the Change in
Control, whose computation shall be conclusive and binding upon
Employee and the Company) equal to 2.99 times Employee's "base
amount" as defined in Section 280G(b)(3) of the Internal Revenue
Code of 1986, as amended (the "Code"). Such lump-sum payment is
hereinafter referred to as the "Termination Compensation." Upon
payment of the Termination Compensation and all amounts to which
Employee may be entitled under subparagraph 2(b)(i) , any
Employment Agreement between Employee and the Company shall
terminate and be of no further force or effect; provided,
however, that (x) if Employee shall, in terminating his
employment with the Company pursuant to paragraph 2(a), include
in his Notice of Termination (as hereafter defined) his election
to enforce his rights under the provisions of his Employment
Agreement and not under the provisions of this Agreement or (y)
if Employee shall, within thirty (30) calendar days after he has
obtained actual knowledge of the termination of his employment by
the Company other than pursuant to paragraph 3(a) of this
Agreement, notify the Company that he intends to enforce his
rights under the Employment Agreement, then, in each such case,
any Employment Agreement between Employee and the Company shall
remain in full force and effect and the provisions of this
Agreement shall terminate and be of no further force or effect
and Employee shall hold, for the benefit of the Company, any
payment on account of the Termination Compensation theretofore
received by him hereunder, pending the satisfaction of the
Company's obligations to Employee under the provisions of any
Employment Agreement between Employee and the Company (whereupon
Employee shall return any such Termination Compensation to the
Company).
(c) For purposes hereof, a Change in Control shall be deemed
to have occurred if there has occurred a change in control as the
term "control" is defined in Rule 12b-2 promulgated under the
Securities Exchange Act of 1934 as in effect on the date hereof
(the "Act"); (ii) when any "person" (as such term is defined in
Sections 3(a)(9) and 13(d)(3) of the Act), except for an employee
stock ownership trust (or any of the trustees thereof) of the
Company, becomes a beneficial owner, directly or indirectly, of
securities of the Company representing twenty-five (25%) percent
or more of the Company's then outstanding securities having the
right to vote on the election of directors; (iii) during any
period of not more than two (2) consecutive years (not including
any period prior to the execution of this Agreement), individuals
who at the beginning of such period constitute the Board, and any
new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a
transaction described in clauses (i), (ii), (iv), (v), (vi) or
(vii) of this subparagraph 2(c)) whose election by the Board or
nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors
then still in office who were either directors at the beginning
of the period or whose election or nomination for election was
previously approved, cease for any reason to constitute at least
seventy-five (75%) percent of the entire Board of Directors; (iv)
when a majority of the directors elected at any annual or special
meeting of stockholders (or by written consent in lieu of a
meeting) are not individuals nominated by the Company's incumbent
Board of Directors; (v) if the stockholders of the Company
approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would
result in the holders of voting securities of the Company
outstanding immediately prior thereto being the holders of at
least eighty (80%) percent of the voting securities of the
surviving entity outstanding immediately after such merger or
consolidation; (vi) if the shareholders of the Company approve a
plan of complete liquidation of the Company; or (vii) if the
shareholders of the Company approve an agreement for the sale or
disposition of all or substantially all of the Company's assets.
However, the foregoing notwithstanding, no Change in Control
shall be deemed to have occurred as a result of any event
specified in clauses (i)-(vii) of this paragraph 2(c) if Xxxxxxxx
Xxxxx or Xxxx Xxxxx shall be the chief executive officer of the
Company following such event.
(d) Notwithstanding anything in this Agreement to the contrary,
Employee shall have the right, prior to the receipt by him of any
amounts due hereunder on amounts referred to in subparagraph
2(b)(i), to waive the receipt thereof or, subsequent to the
receipt by him of any amounts due hereunder, to treat some or all
of such amounts as a loan from the Company which Employee shall
repay to the Company, within ninety (90) days from the date of
receipt, with interest at the rate provided in Section 7872 of
the Code. Notice of any such waiver or treatment of amounts
received as a loan shall be given by Employee to the Company in
writing and shall be binding upon the Company.
(e) It is intended that the "present value" of the payments and
benefits to Employee, whether under this Agreement or otherwise,
which are includable in the computation of "parachute payments"
shall not, in the aggregate, exceed 2.99 times the "base amount"
(the terms "present value", parachute payments" and "base amount"
being determined in accordance with Section 280G of the Code).
Accordingly, if Employee receives payments or benefits from the
Company prior to payment of the Termination Compensation which,
when added to the Termination Compensation and any other payments
or benefits which are required to be included in the computation
of parachute payments which have not been waived or treated as a
loan (as contemplated by subparagraph 2 (d)), would, in the
opinion of the Accountants, subject any of the payments or
benefits to Employee to the excise tax imposed by Section 4999 of
the Code, the Termination Compensation shall be reduced by the
smallest amount necessary, in the opinion of the Accountants, to
avoid such tax. In addition, the Company shall have no
obligation to make any payment or provide any benefit to Employee
subsequent to payment of the Termination Compensation which, in
the opinion of the Accountants, would subject any of the payments
or benefits to Employee to the excise tax imposed by Section 4999
of the Code. No reduction in Termination Compensation or release
of the Company from any payment or benefit obligation in reliance
upon any aforesaid opinion of the Accountants shall be permitted
unless the Company shall have provided to Employee a copy of any
such opinion, specifically entitling Employee to rely thereon, no
later than the date otherwise required for payment of the
Termination Compensation or any such later payment or benefit.
(f) Promptly after a Change in Control occurs, or before a
Change in Control occurs if there is a high degree of probability
that a Change in Control will occur in the immediate future, as
determined by the Chief Executive Officer of the Company, the
Company shall deliver to a bank, or other institution approved by
Employee, as escrow agent, an amount of cash funds or short term
investments necessary to fund the Termination Compensation and
instruct such escrow agent to make the payments of such employee
benefits due Employee in the amounts and at the time provided in
paragraph 2(b). The amount to be delivered to such escrow agent
hereunder shall be sufficient to fund such payments from
principal, and all income on the escrowed funds shall be paid to
the Company at the time the principal is paid to the Employee;
provided, however, that any income earned after the Termination
Date on principal not paid to Employee at the time provided in
paragraph 2(b) shall be paid to Employee at reasonable intervals.
3. Termination by The Company.
(a) Except as otherwise provided in any other agreement between
Employee and the Company, Employee's employment may be terminated
by the Company without any further liability under this Agreement
if Employee shall (i) die; (ii) be totally unable to perform the
duties and services attached to his position with the Company for
a period of not less than 365 consecutive days due to illness or
incapacity, whether physical or mental; (iii) violate any written
contractual covenant of Employee then in effect in favor of the
Company prohibiting Employee from competing with the Company in
any manner materially detrimental to the Company; or (iv) be
convicted of a felony involving an act against the Company and
said conviction shall not have been reversed or be subject to
further appeal, it being expressly understood, however, that
conviction for violation of a criminal statute by reason of
actions taken in the course of performance of Employee's duties
as an executive of the Company shall not be deemed to involve an
act against the Company for purposes hereof unless involving a
theft, embezzlement or other fraud against the Company or any of
its officers, directors or employees, or unless involving an act
of physical harm to any of such persons.
(b) After a Change in Control has occurred, if Employee's
employment is terminated by the Company pursuant to subparagraph
3(a) hereof, Employee (or his widow, or if she shall not survive
him, any party designated by Employee by notice to the Company,
or Employee's estate, in the absence of such notice) shall
receive the sums (if any) Employee would otherwise have received
if a Change in Control had not occurred.
4. Notice of Termination and Termination Date.
(a) Any termination of Employee's employment by the Company or
by Employee shall be communicated by a Notice of Termination to
the other party hereto. For purposes hereof, a "Notice of
Termination" shall mean a notice which shall state the
"Termination Date" (as hereafter defined) and the specific
reasons, and shall set forth in reasonable detail the facts and
circumstances, for such determination and, in the case of
Employee's termination of employment pursuant to paragraph 2 (a)
(iii) hereof, shall state that Employee has made the good faith
determination required by that subparagraph.
(b) "Termination Date" shall mean the date specified in the
Notice of Termination as the last day of Employee's employment by
the Company, which date shall not be sooner than the date on
which the Notice of Termination is given.
(c) If within thirty (30) calendar days after any Notice of
Termination is given, or, if later, prior to the Termination Date
(as determined without regard to this paragraph 4(c)), the party
hereto receiving such Notice of Termination notifies the other
party hereto that a dispute exists concerning the termination,
the Termination Date shall be the date on which the dispute is
finally determined, either by mutual written agreement of the
parties hereto, by a binding arbitration award or by a final
judgment, order or decree of a court of competent jurisdiction
(which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected);
provided, however, that the Termination Date shall be extended by
a notice of dispute only if such notice is given in good faith
and the party hereto giving such notice pursues the resolution of
such dispute with reasonable diligence. Notwithstanding the
pendency of such dispute, the Company will continue to pay to
Employee his full compensation (including perquisites and other
benefits) in effect when the notice of dispute was given and
continue Employee as a participant in all employee benefit plans
and programs in which he was participating when the notice of
dispute was given, until the dispute is finally resolved as
hereinabove provided.
5. Mitigation. Employee shall not be required to use his best
efforts to mitigate the payment of the Termination Compensation
by seeking other employment. To the extent that Employee shall,
during or after the Term, receive compensation from any other
employment, the payment of Termination Compensation shall not be
adjusted.
6. Arbitration. In the event any dispute arises between the
parties hereto, Employee and the Company shall each have the
right to seek arbitration in New York, New York under the rules
of the American Arbitration Association by giving written notice
of intention to arbitrate to the other party. Any award rendered
in any such arbitration proceeding shall be non-appealable and
final and binding upon the parties hereto, and judgment thereon
may be entered in any court of competent jurisdiction. If
Employee prevails in any litigation or arbitration proceeding
brought in accordance herewith, or if any such litigation or
arbitration proceeding is settled, Employee shall be entitled, to
the extent not prohibited by applicable law, to reimbursement
from the Company for his reasonable attorneys' fees and expenses
incurred in connection with such litigation or arbitration
proceeding.
7. Indemnification.
(a) The Company agrees that all rights to indemnification
existing immediately prior to a Change in Control and all rights
to indemnification existing immediately prior to the Termination
Date in favor of Employee as provided in the respective corporate
charters and by-laws of the Company and its subsidiaries shall
survive the Termination Date and shall continue in full force and
effect for a period of not less than ten (10) years after the
Termination Date. Until the expiration of such period, the
Company shall also indemnify Employee to the fullest extent
permitted by the Delaware General Corporation Law; provided, that
in the event that any claim shall be asserted or made within such
ten-year period, all rights to indemnification in respect of any
such claim shall continue until disposition of such claim.
Without limiting the foregoing, in the event that Employee
becomes involved in any capacity in any action, proceeding or
investigation in connection with any activities involving the
Company occurring on or prior to the Termination Date, the
Company will, subject to paragraph 7(b), advance to Employee his
reasonable legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith.
(b) Employee shall give prompt written notice to the Company of
any claim and the commencement of any action, suit or proceeding
for which indemnification may be sought under this paragraph 7,
and the Company, through counsel reasonably satisfactory to
Employee, may assume the defense thereof; provided, however, that
Employee shall be entitled to participate in any such action,
suit or proceeding with counsel of his own choice but at his own
expense; and provided, further, the Employee shall be entitled to
participate in any such action, suit or proceeding with counsel
of his own choice at the expense of the Company if, in the good
faith judgment of Employee's counsel, representation by the
Company's counsel may present a conflict of interest or there may
be defenses available to Employee which are different from or in
addition to those available to the Company. In any event, if the
Company fails to assume the defense within a reasonable time,
Employee may assume such defense and the reasonable fees and
expenses of his attorneys shall be borne by the Company. No
action, suit or proceeding for which indemnification may be
sought shall be compromised or settled in any manner which might
adversely affect the interest of the Company without the prior
written consent of the Company. Notwithstanding anything in this
Agreement to the contrary, the Company shall not, without the
written consent of Employee, (i) settle or compromise any action,
suit or proceeding or consent to the entry of any judgment which
does not include as an unconditional term thereof the delivery by
the claimant or plaintiff to Employee of a written release from
all liability in respect of such action, suit or proceeding or
(ii) settle or compromise any action, suit or proceeding in any
manner that may materially and adversely affect Employee other
than as a result of money damages or other money payments for
which the Company fully pays.
(c) The Company shall cause to be maintained in effect, for not
less than two (2) years after the Termination Date, the then
current policies of the directors' and officers' liability
insurance maintained by the Company and the Company's
subsidiaries provided that the Company may substitute therefor
policies of at least the same coverage containing terms and
conditions which are no less advantageous so long as no lapse in
coverage occurs as a result of such substitution, and shall use
its best efforts to provide such insurance for an additional
three (3) years after the expiration of such two-year period,
subject to the availability of such insurance at commercially
reasonable rates (or, if not available at reasonable rates, then
the Company shall purchase similar insurance but with such lower
limits of liability, without change in retention amounts, as may
be available for a premium comparable to that paid by the Company
for the last year of such two-year period), with respect to all
matters occurring prior to and including the Termination Date;
provided, that in the event that any claim shall be asserted or
made within such period during which insurance has been or is to
be provided, such insurance shall be continued in respect of any
such claim until final disposition of any and all such claims.
The Company shall pay all expenses, including reasonable
attorneys' fees, that may be incurred by Employee in enforcing
the indemnity and other obligations provided for in this
paragraph 7. The covenant in this paragraph 7 shall survive the
Termination Date and shall continue without time limit (except as
expressly provided in this paragraph 7).
8. Assignability. This Agreement may not be assigned by
Employee and all of its terms and conditions shall be binding
upon and enure to the benefit of Employee and his heirs, legatees
and legal representatives and the Company and its successors and
assignees. Successors of the Company shall include, without
limitation, any corporation or corporations acquiring directly or
indirectly all or substantially all of the assets of the Company,
whether by merger, consolidation, purchase or otherwise, and such
successor shall thereafter be deemed the "Company" for purposes
hereof.
9. Notices. All notices, requests, demands and other
communications provided for hereby shall be in writing and shall
be deemed to have been duly given when delivered personally when
received, or sent by registered or certified mail, return receipt
requested, or by Federal Express or other equivalent overnight
courier, in each case with the cost of delivery prepaid, to the
party entitled thereto at the address first above written (in the
case of the Company) or to such address as contained in the
Company's records (in the case of Employee) or to such other
address as may be designated by notice pursuant to this
paragraph.
10. Modification. This Agreement may be modified or amended
only by an instrument in writing signed by Employee and the
Company and any provision hereof may be waived only by an
instrument in writing signed by the party hereto against whom any
such waiver is sought to be enforced.
11. Severability. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or
enforceability of any other provision contained herein.
12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York,
without regard to principles of conflicts of law.
13. Captions. The captioned headings herein are for convenience
of reference only and are not intended and shall not be construed
to have any substantive effect.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above written.
SWANK, INC.
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: President
___________________________________
Name of Employee:
Schedule A
Xxxxxxx X. Xxxxxx, Xx. 00 Xxxxx Xxx. By: /s/ Xxxxxxx X. Xxxxxx, Xx.
Norwalk, Connecticut
Xxxx Xxxxxxx 000 Xxxxxxx Xx. By: /s/ Xxxx Xxxxxxx
Swansea, Massachusetts
Xxxxxx Xxxxxxxxx 00-00 Xxxxx Xxx. By: /s/ Xxx Xxxxxxxxx
Rockville Centre,
New York
Xxxxx Xxxxxx 00 Xxxxxxxx Xx By: /s/ Xxxxxxx Xxxxx Xxxxxx
Xxxxxx, Connecticut
Xxxxxxxx X. Xxxxxx 00 Xxxxxxxx Xx. By: /s/ Xxxxxxxx X. Xxxxxx
Weston, Connecticut
Xxxxxx X. Xxxxxxx 14 Xxxxxx Dr. By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx, Massachusetts
Xxxx X. Xxxx 00 Xxxxxxxx Xx. By: /s/ Xxxx X. Xxxx
Huntington, New York
Xxxxxxxxx X. Xxxxxx 00 Xxxx Xx. By: /s/ Xxxxxxxxx Xxxxxx
Attleboro, Massachusetts
Xxxxxxxx Xxxx 000 Xxxxxxx Xxx., #0 By: /s/ Xxxxxxxx Xxxx
Newport, Rhode Island
Xxxxxx Xxxxxxxxx 00 Xxx Xxxx Xx. By: /s/ Xxxxxx Xxxxxxxxx
Great Neck, New York
Xxxxxxx Xxxxx 3787 Paces Ferry West By: /s/ Xxxxxxx X. Xxxxx
Atlanta, Georgia
Xxxxx Xxxxxxx 000 X. Xxxxxxxx Xx. By: /s/ Xxxxx Xxxxxxx
Apt. 101
Beverly Hills, California
Xxxxx Xxxxx 00000 Xxxxx 000xx Xxx By: /s/ Xxxxx X. Xxxxx
Scottsdale, Arizona
Xxxx Xxxxx 0000 Xxxxxx Xx. By: /s/ Xxxxxxxxxxx X. Xxxx
Hewlett, L.I., New York By: /s/ Xxxx Xxxxx
Xxxxxxxx Xxxxx 0000 Xxxxx Xx. By: /s/ Xxxxxxxx Xxxxx
Hewlett, L.I., New York
Xxxxx Xxxxxxx 00 Xxxxxxx Xx. By: /s/ Xxxxx X. Xxxxxxx
Riverdale, New Jersey
Xxxxxxxxxxx X. Xxxx 000 X. Xxxxxxx Xx. By: /s/ Xxxxxxxxxxx X. Xxxx
Lexington, Massachusetts
