Exhibit 10.1
EMPLOYMENT AGREEMENT
BETWEEN
HAMPSHIRE GROUP, LIMITED
AND
XXXXXXX XXXXX
THIS AGREEMENT made and entered into as of the 14th day of September, 2006
(the "Effective Date") by and between Hampshire Group, Limited, a Delaware
corporation, with offices at 0000 Xxxxxxx Xxxxx Xxxx, Xxxxxxxx, XX 00000
("Hampshire Group" or the "Company"), and Xxxxxxx Xxxxx, an individual residing
at 00 Xxxxx Xxxxx, Xxxxxxxx, XX 00000 ("Xxxxx").
WHEREAS, Hampshire Group is the parent corporation for a number of apparel
businesses, including Hampshire Designers, Inc. ("Hampshire Designers");
WHEREAS, Xxxxx currently serves as the Executive Vice President Global
Sourcing of Hampshire Designers;
WHEREAS, Hampshire Group desires for Xxxxx to assume the role of Senior
Vice President Global Sourcing at the Hampshire Group level, thereby assuming
responsibility for global sourcing at all of Hampshire Group's businesses; and
WHEREAS, Xxxxx desires to become Senior Vice President Global Sourcing of
Hampshire Group upon the terms and conditions stated in this Agreement.
NOW THEREFORE, in consideration of the premises, mutual covenants,
conditions and promises in this Agreement, the parties hereto agree as follows:
1. Employment. Subject to the terms and conditions contained herein, Xxxxx
will serve as Senior Vice President Global Sourcing of the Company and, in such
capacity, will report directly to the Chief Executive Officer of the Company and
will be responsible for such things as (i) product development and costing, (ii)
production planning and control, including vendor sourcing and allocations,
(iii) product quality assurance, (iv) technical design, (v) social compliance,
(vi) customs compliance, (vii) first sale compliance and (viii) import
logistics. The parties agree that this list of responsibilities is for
illustrative purposes only and is subject to change.
2. Term. The terms of this Agreement shall apply for fiscal year 2006 and
for each fiscal year thereafter unless sooner terminated as herein provided.
3. Salary. As compensation for his services, Xxxxx will be paid a base
salary of Three Hundred and Six Thousand Dollars ($306,000.00) per annum,
payable in monthly installments less appropriate withholdings and deductions
required by law.
4. Signing Bonus. On the first regularly scheduled payroll date after the
Effective Date, Xxxxx shall be paid a one-time bonus in the amount of $187,500,
less appropriate withholdings and deductions required by law.
5. Annual Bonus.
(A) For 0000, Xxxxx shall be entitled to an Annual Bonus based upon
the Bonus Program for Hampshire Designers set forth on Exhibit 1 attached
hereto. For future years, the company and Xxxxx shall establish a mutually
acceptable bonus program based on the performance of Hampshire Group.
(B) The Company agrees to pre-pay annually, on a calendar year basis,
to Xxxxx Twenty Five Thousand Dollars ($25,000) of the anticipated Annual Bonus
("Pre-Paid Bonus"), which amount will be made in equal monthly installments of
Two Thousand Eighty Three Dollars and Thirty Three Cents ($2083.33), less
appropriate withholdings and deductions required by law. In the event the Annual
Bonus earned by Xxxxx in any given year ("Actual Amount") is less than the
Pre-Paid Bonus for that year, such shortfall shall be deducted from succeeding
years' Annual Bonus.
6. Benefits. Xxxxx shall be entitled to participate in group insurance
plans, pension and other employee benefits provided to other senior executives
of the Company on terms no less favorable than those available to such senior
executives of the Company. In addition, during the term hereof, the Company
shall pay Xxxxx up to an additional $1,200.00 on a monthly basis, less
appropriate withholdings and deductions required by law, toward the cost of a 15
year term life insurance policy with a $750,000 death benefit for the benefit of
his surviving spouse or such individual or organization designated by Xxxxx. For
the avoidance of doubt, Xxxxx will be the owner of this policy and, accordingly,
he may take it with him upon the termination of this Agreement.
7. Termination.
(A) The Company may terminate the employment relationship at any time
for any reason. If Xxxxx'x employment is terminated by the Company for any
reason other than for cause (other than by reason of Xxxxx'x "disability"
(within the meaning of the Company's long-term disability policy)), Xxxxx shall
be paid severance in the amount of One Hundred Fifty Thousand Dollars
($150,000), payable in monthly installments of Twenty Five Thousand Dollars
($25,000) less appropriate withholdings and deductions required by law. In
addition, if Xxxxx is terminated during any fiscal quarter other than the first
fiscal quarter of a given year, he will also be entitled to receive a pro rata
portion of any Annual Bonus he would otherwise have been entitled to receive
under Paragraph 3(A) hereof, less appropriate withholdings and deductions
required by law; such pro rata amount will be paid after year end in accordance
with the Company's customary payroll practices and will be calculated by
multiplying the Annual Bonus he would otherwise have been entitled to receive
under Paragraph 3(A) hereof by a
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fraction, the numerator of which is the number of completed full months in the
current fiscal year through the date of termination (by way of example, if Xxxxx
is terminated on August 16, the numerator will be seven) and the denominator of
which is 12. Xxxxx will not be entitled to and shall not receive any additional
compensation or benefits of any other type following the date of termination. If
the Company terminates the employment for cause, Xxxxx will not be entitled to
and shall not receive any severance, bonus or benefits of any type following the
date of termination.
For purposes of this Agreement, "cause" for termination shall
exist only if Xxxxx (i) is convicted of, or pleads nolo contendere to, a felony
involving moral turpitude; (ii) breaches any material provision of this
Agreement or willfully fails or refuses to carry out the material
responsibilities of his employment with the Company under this Agreement; or
(iii) engages in any other willful misconduct or a pattern of behavior in
violation of this Agreement or Company policy which has had, or is reasonably
likely to have, a significant adverse effect on the Company.
(B) Xxxxx may terminate the employment relationship at any time for
any reason by giving written notice at least three (3) months prior to the
effective date of termination. In the event of termination of Xxxxx'x employment
under this Paragraph 7(B), he shall have the right to retain all compensation
(including Pre-Paid Bonus paid through the date of such written notice) and
reimbursements for outstanding expenses incurred on behalf of the Company
through the effective date of termination but will not be entitled to and shall
not receive any severance, bonus or benefits of any type following the date of
termination; provided, however, that any Pre-Paid Bonus otherwise payable from
the date such written notice is provided through the date of termination shall
no longer be payable. In addition, during such three (3) month notice period,
the Company may, in its sole and absolute discretion, prohibit Xxxxx from
entering the premises of the Company for all or any portion of such notice
period (which in no event shall be treated as a termination by the Company
without cause), provided that the Company shall continue to pay to Xxxxx his
then base salary (but not any Pre-Paid Bonus) and continue benefits provided
pursuant to Paragraph 6 above for the duration of the notice period.
8. Covenants of Xxxxx.
(A) At any time during and after Xxxxx'x employment hereunder, without
the prior written consent of the Company, except to the extent required by an
order of a court having jurisdiction or under subpoena from an appropriate
government agency, in which event, Xxxxx shall use his best efforts to consult
with the Company prior to responding to any such order or subpoena, and except
as required in the performance of his duties hereunder, Xxxxx shall not disclose
to or use for the benefit of any third party any Confidential Information.
(B) At any time during and after Xxxxx'x employment hereunder and
during the six (6) month period immediately following any termination of such
employment for any reason, Xxxxx shall not, directly or indirectly, for his own
account or for the account of any other individual or entity, engage in
Interfering Activities.
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(C) For purposes of this Agreement:
(1) "Confidential Information" shall mean confidential or
proprietary trade secrets, client lists, client identities and information,
information regarding service providers, investment methodologies, marketing
data or plans, sales plans, management organization information, operating
policies or manuals, business plans or operations or techniques, financial
records or data, or other financial, commercial, business or technical
information (i) relating to the Company or any of its subsidiaries, or (ii) that
the Company or any of its subsidiaries may receive belonging to suppliers,
customers or others who do business with the Company, but shall exclude any
information that is in the public domain or hereafter enters the public domain,
in each case without the breach by Xxxxx of this Paragraph 8.
(2) "Interfering Activities" shall mean (i) encouraging,
soliciting, or inducing, or in any manner attempting to encourage, solicit, or
induce, any individual employed by the Company or any of its subsidiaries to
terminate such individual's employment with the Company or any of its
subsidiaries, or (ii) encouraging, soliciting or inducing, or in any manner
attempting to encourage, solicit or induce any client, account, customer,
licensee or other business relation of the Company or any of its subsidiaries to
cease doing business with or reduce the amount of business conducted with the
Company or any of its subsidiaries, or in any way interfere with the
relationship between any such client, account, customer, licensee or business
relation and the Company or any of its subsidiaries.
(C) Xxxxx acknowledges and recognizes the highly competitive nature of
the Company's business, that access to Confidential Information renders him
special and unique within the Company's industry, and that he will have the
opportunity to develop substantial relationships with existing and prospective
clients, accounts, customers, consultants and contractors, investors and
strategic partners of the Company during the course of and as a result of his
employment with the Company. In light of the foregoing, Xxxxx acknowledges and
agrees that the restrictions and limitations set forth in this Paragraph 8 are
reasonable and valid in geographical and temporal scope and in all other
respects, and are essential to protect the value of the business and assets of
the Company and its subsidiaries.
(D) Xxxxx expressly acknowledges that any breach or threatened breach
of any of the terms and/or conditions set forth in this Paragraph 8 may result
in substantial, continuing and irreparable injury to the Company. Therefore,
Xxxxx hereby agrees that, in addition to any other remedy that may be available
to the Company, the Company shall be entitled to injunctive relief, specific
performance or other equitable relief by a court of appropriate jurisdiction in
the event of any breach or threatened breach of the terms of this Paragraph 8
without the necessity of proving irreparable harm or injury as a result of such
breach or threatened breach.
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9. Independence; Severability; Blue Pencil. Each of the rights
enumerated in this Agreement shall be independent of the others and shall be in
addition to and not in lieu of any other rights and remedies available to the
Company at law or in equity. If any of the provisions of this Agreement or any
part of any of them is hereafter construed or adjudicated to be invalid or
unenforceable, the same shall not affect the remainder of this Agreement, which
shall be given full effect without regard to the invalid portions. If any of the
covenants contained herein are held to be invalid or unenforceable because of
the duration of such provisions or the area or scope covered thereby, the
parties hereto agree that the court making such determination shall have the
power to reduce the duration, scope and/or area of such provision to the maximum
and/or broadest duration, scope and/or area permissible by law and in its
reduced form said provision shall then be enforceable.
10. Entire Agreement. This Agreement contains the entire understanding
of the Company and Xxxxx with respect to compensation of Xxxxx and supersedes
any and all prior understandings, written or oral. This Agreement may not be
amended, waived, discharged or terminated orally, but only by an instrument in
writing signed by both parties.
11. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
the conflict of law principles thereof.
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IN WITNESS WHEREOF, the parties hereto have set their respective hands and
seals as of the day and year first above written.
HAMPSHIRE GROUP, LIMITED
By: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxx Xxxxx
-------------------------- ---------------------------
Name: Xxxxxxx X. Xxxxxx Xxxxxxx Xxxxx
Title: Interim President and
Chief Executive Officer
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