Exhibit 10.67
DEFERRED COMPENSATION AGREEMENT
This Deferred Compensation Agreement ("Agreement") is made between ____________
"Employee") and Farah U.S.A., Inc. ("Employer") on the following terms and
conditions:
1. Beginning January 1, 1998 and continuing through December 31, 1998,
Employee and Employer agree that Employee's monthly salary shall be reduced
5% (must be 5% or more) each month during the aforementioned period
("Deferred Income") and the monthly payments of Employee's salary shall be
recalculated accordingly.
2. The following accrual, crediting and vesting rules shall apply with respect
to this Agreement.
a) Employer shall accrue on December 31, 1998 an amount equal to
the Employee's total Deferred Income during 1998 and shall
credit that sum to a separate memorandum account on its books
("_________ 1998 Deferral Account" or "Deferral Account").
b) In addition, on December 31, 1998 Employer shall accrue
and credit the following to the Employee's Deferral Account:
(i) an amount in lieu of interest equal to the sum of eleven
(11) amounts, each such amount calculated as of the last day
of each month during 1998 other than January 31 by multiplying
the Farah U.S.A., Inc. weighted average monthly interest
rate on short-term borrowing during Farah U.S.A., Inc.'s most
recently completed fiscal year (i.e., the fiscal year ended
October 31, 1998) by the Employee's Deferred Income as of the
last day of the preceding month pursuant to this Agreement
(with the Employee's Deferred Income pursuant to this
Agreement with respect to each month deemed accrued as of the
last day of such month) and (ii) five percent (5%) of the
Employee's total salary during the time period described in
paragraph 1 above ("Matching Amount"). No amount in lieu of
interest shall be accrued or credited to the Deferral Account
for 1998 on the amounts described in (ii) above.
c) After December 31, 1998, until payment of the Employee's
vested Deferral Account balance as provided in paragraph 3
hereof, the Deferral Account shall be credited on December 31
of each year with an amount in lieu of interest calculated by
multiplying the Employee's total Deferred Account balance as
of that December 31 (including his Deferral Income, Matching
Amount and previously credited sums in lieu of interest) times
the Farah U.S.A., Inc. weighted average annual interest rate
on short-term borrowing during Farah U.S.A., Inc.'s most
recently completed fiscal year. In the event of a partial
calendar year time period, the amount in lieu of interest for
post-1998 calendar years shall be calculated as previously
described and prorated for the appropriate time period using
the Farah U.S.A., Inc. weighted average annual interest rate
on short-term borrowing during Farah U.S.A. Inc.'s prior
fiscal year, even if the partial calendar year time period
ends on or after the last day of Farah U.S.A., Inc.'s current
fiscal year.
d) Notwithstanding the foregoing to the contrary, if Employee
terminates his employment with Farah Incorporated and all of
its wholly owned subsidiaries incorporated in the United
States ("Farah Entities" or, individually, a "Farah Entity")
during calendar year 1998, the following rules shall apply
with respect to the matching amount that Employee shall (or
shall not) be entitled to with respect to calendar year 1998:
(i) If Employee's termination of employment was
voluntary and for a reason other than retirement on
or after age 60 or involuntary and for cause,
Employee shall not be entitled to nor credited with
any matching amount with respect to calendar year
1998; and
(ii) If Employee's termination of employment was voluntary
and because of retirement on or after age 60 or
involuntary and not for cause (including, but not
limited to, termination of employment due to death
or permanent and total disability), Employee shall
be entitled to a prorated matching amount with
respect to the calendar year in which his
termination of employment occurs equal to five (5%)
of Employee's total salary during the portion of
calendar year 1998 with respect to which he has
deferred compensation pursuant to Farah Incorporated
1993 Unfunded Deferred Compensation Plan ("Plan").
The Stock Option and Compensation Committee of the Board of Directors
of Farah Incorporated (or its authorized representative) shall
determine, in its sole discretion, whether the Employee is entitled to
a matching amount pursuant to the foregoing paragraphs of this
Agreement and the Plan (including, but not limited to, determining
whether Employee's termination of employment was voluntary or
involuntary or for cause or not for cause).
e) If Employee terminates his employment with all Farah Entities,
Employee shall receive amounts in lieu of interest in the
manner described in the preceding paragraphs until payment
of Employee's entire vested Deferred Account balance is
made. However, notwithstanding the foregoing to the contrary,
with respect to the calendar year in which the last payment is
made to Employee pursuant to paragraph 3 (or the only payment,
if a lump sum payment is to be made) of this Agreement, no
amounts in lieu of interest shall be accrued or paid later
than the date of such last payment and the rules for the
determination of amounts in lieu of interest for partial
calendar year time periods shall be utilized to determine
the amount in lieu of interest which shall be included with
the last payment made to Employee with respect to the
Agreement.
3. The total deferred compensation due to Employee, consisting of the
total amounts credited to and vested in the Deferral Account, shall
be paid to the Employee in the form of a lump sum on January 9, 1999.
Should Employee die before receiving all amounts payable to him
pursuant to this Agreement, and at such time is an employee of Farah
Entity, the remaining amounts shall be paid in a lump sum (or in a lump
sum to each beneficiary if there is more than one beneficiary, the
sum of which shall not exceed the remaining amounts payable to
Employee) 30 days after Employee's death to his beneficiary(ies) under
Employee's primary life insurance plan (per total death benefit
payable due to Employee's death) maintained by a Farah Entity with
respect to which a Farah Entity defrays or has defrayed Employee's
cost of coverage. If Employee is not employed by a Farah Entity
at the time of death, all unpaid amounts in the Deferral Account shall
be paid in a lump sum 30 days after Employee's death to the estate of
the Employee.
4. It is specifically agreed that the amounts credited to Employee in the
Deferral Account shall not be held by a Farah Entity in a trust,
escrow or similar arrangement or other fiduciary capacity. The
Deferral Account shall not be subject in any manner to attachment or
other legal process for debts of Employee or his successors or legal
representatives for any reason; and neither Employee, nor any legal
representative or successor shall have any right against a Farah
Entity with respect to any portion of the Deferral Account, except as a
general unsecured creditor of a Farah Entity. Neither Employee, his
successors or legal representatives shall have any right to assign,
transfer, pledge, hypothecate, anticipate or otherwise alienate any
payment of deferred compensation to become due in the future to such
person, and any attempt to do so shall be void and will not be
recognized by a Farah Entity.
5. Employee acknowledges that he has received a copy of the Plan and that
he understands the terms and conditions of the Plan.
6. Employee agrees that by executing this Agreement he and his
beneficiary(ies) and their successors or legal representatives and any
other person claiming any amount pursuant to this Agreement are bound
by all of the terms of the Plan, pursuant to which this Agreement is
executed.
7. Employee agrees that his election to defer compensation pursuant to
this Agreement is irrevocable and no sale, transfer, alienation,
assignment, pledge, encumbrance, garnishment, collateralization,
anticipation or attachment of any benefits under the Plan shall be
valid or recognized.
Executed this__________ day of ___________________, 1997.
EMPLOYER
By____________________________________________
EMPLOYEE
By____________________________________________
Below is a list of variables to the Deferred Compensation Agreements chosen by
the officers required to file with this Form 10-K.
Name Period of Deferral % Deferred Payment Date
Xxxxxxx X. Xxxxxxxx January 1, 1998 to 5% January 9, 1999
December 31, 1998
Xxxxxx X. Xxxxxxx January 1, 1998 to 5% January 9, 1999
December 31, 1998
Xxxxxxx X. Xxxxxx January 1, 1998 to 7% January 9, 1999
December 31, 1998
Xxxxxxx X. Xxxxxxxx January 1, 1998 to 7% January 9, 1999
December 31, 1998
