AMENDED EMPLOYMENT CONTRACT
AMENDED EMPLOYMENT CONTRACT ("Contract") dated as of May 1, 2000,
among XXXXXXX & XXXXX, INC. ("Xxxxxxx & Xxxxx"), a Delaware corporation, and WG
APPAREL, INC. ("WG Apparel"), a Delaware corporation (collectively "WG" or
"Employer"), both of whose business address is 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx
Xxxxxx, and XXXX X. XXXXXXX, XX., whose address is 00 Xxxxx Xxxxx, Xxxxxxx, Xxx
Xxxxxx 00000 ("Employee").
WG desires to engage Employee to perform services as an executive
officer of WG and Employee desires to perform such services, on the terms and
conditions hereinafter set forth.
Accordingly, WG and Employee agree as follows:
1. TERM.
Subject to the terms hereof, the term of this Contract shall
commence as of the Effective Date (as defined in the "Plan") of the Joint Plan
of Reorganization of Xxxxxxx & Xxxxx, Inc. and Certain Subsidiaries dated as of
December 22, 1999, as the same may be amended prior to confirmation ("Plan"),
and shall continue for a term of one year, and shall be renewed for successive
one-year terms (all of which shall be referred to as the "Employment Period")
unless either party provides written notice of nonrenewal no less than 90 days
from the expiration of any term. This Contract amends and restates in full that
certain Employment Contract between WG Apparel and Xxxx Xxxxxxx dated June 27,
1994 (the "Original Contract") by replacing the Original Contract with the
Contract.
2. NATURE OF SERVICES.
During the Employment Period, Employee shall be employed by WG as
Chairman of the Board and Chief Operating Officer of Xxxxxxx & Xxxxx and WG
Apparel (the "Position"). Employee shall be subject to the policy direction of
the Boards of Directors of Xxxxxxx & Xxxxx and WG Apparel (the "Boards"). He
shall oversee all aspects of the operation of WG's business consistent with the
Position, and shall perform such responsibilities and duties consistent with the
Position as may reasonably be requested of him, from time to time, by the
Boards.
3. EMPLOYEE OBLIGATIONS.
Employee shall devote substantially all his business time and
efforts to the performance of his duties under this Contract and shall observe
faithfully and carry out all of the duties and responsibilities customarily owed
by an employee to his employer.
4. SALARY.
Employee's salary during the Employment Period shall be fixed
from time to time by the Boards, but shall not be less than $250,000 per
annum, payable in equal installments no less frequently than monthly.
5. INCENTIVE COMPENSATION.
Employee shall be entitled to receive Incentive Compensation during
the Employment Period pursuant to WG's Incentive Compensation Plan for Key
Employees ("WG Plan"). In accordance with the terms of the WG Plan, incentive
compensation awards will be paid, if at all, no later than March 31 following
the end of each year,
6. EXPENSES; VACATIONS; FRINGE BENEFITS.
During the Employment Period, Employee shall receive: (i)
reimbursement for travel, entertainment and other expenses incurred in the
performance of his duties in accordance with WG's standard policies as in effect
from time to time; (ii) vacations with pay in accordance with WG's regular
procedures governing executives, but no less than four weeks per year; (iii)
participation in such employee compensation, pension, health, welfare and fringe
benefit plans and programs as from time to time may be extended generally to WG
executives, provided that the medical and hospital insurance benefits extended
to Employee shall be at least equal to those benefits provided to him prior to
the effective date of this Contract; (iv) participation in WG's Supplemental
Death and Retirement Plan; (v) use of an automobile comparable to that presently
being used by WG executives; and (vi) such additional compensation, in the form
of incentive compensation or otherwise, and such participation in WG stock
option, stock award, stock purchase or other stock plans, as the Boards may from
time to time provide.
7. NON-COMPETITION.
During the Employment Period and for a period of one year after the
end of the Employment Period, Employee shall not personally conduct or
participate in any activity which is directly competitive with the business of
WG or any subsidiary or other affiliate thereof or any successor to or assign of
the rights of WG or any subsidiary or affiliate thereof, either in the United
States or in any area outside the United States where such businesses are now
conducted. Notwithstanding the foregoing, Employee shall be permitted to own an
interest in any public company which is engaged in such activity, provided
Employee is not part of any control group of such company and Employee's
ownership interest in such company is less than five percent (5%). Employee
acknowledges that the restrictions, prohibitions and other provisions of this
Section 7 are reasonable, fair and equitable in scope, terms and duration, are
necessary to protect the legitimate business interests of WG and are a material
inducement to WG to enter into this Contract. It is the intention of the parties
hereto that the restrictions contained in this paragraph be enforceable to the
fullest extent permitted by applicable law. Therefore, to the extent any court
of competent jurisdiction shall determine that any portion of the foregoing
restrictions is excessive, such provision shall not be entirely void, but rather
shall be limited or revised only to the extent necessary to make it enforceable.
8. PATENTS; INVENTIONS.
All of Employee's interest in patents, patent applications,
inventions, technological innovations, copyrights, developments and processes
now or hereafter during the Employment Period owned or developed by Employee
relating to the business of WG or any subsidiary or other affiliate shall belong
to WG; and without further compensation, but at WG's expense, forthwith upon
request of WG, Employee shall execute any and all such assignments and other
documents and take any and all such other action as WG may reasonably request in
order to vest in WG all Employee's right, title and interest in and to such
patents, patent applications, inventions, technological innovations, copyrights,
developments or processes, free and clear of liens, charges and encumbrances.
9. CONFIDENTIAL INFORMATION.
All confidential information which Employee may now have or may
obtain during the Employment Period relating to the business of WG or any
subsidiary or other affiliate of WG shall not be disclosed to any other persons
either during or after the termination of the Employment Period without the
prior written permission of WG, and Employee shall return all tangible evidence
of such confidential information to WG prior to or at the termination of the
Employment Period. Such information shall not include any information otherwise
publicly known.
10. TERMINATION.
(a) VOLUNTARY TERMINATION. Employee may leave the employ of WG at
any time during the Employment Period for any reason; provided, however, that
Employee shall provide WG with at least 30 days prior written notice of such
voluntary termination and continue to perform his duties during the 30-day
notice period. If Employee voluntarily terminates his employment, Employer shall
pay Employee's salary until the end of the 30-day notice period and shall pay a
portion of the Incentive Compensation to which Employee would have been entitled
for the calendar year in which such termination is effective, pro-rated to the
effective date of such termination. Employer shall have no further obligation to
pay any other compensation or provide any other benefits other than those to
which Employee may be entitled pursuant to WG's plans and programs in effect at
that time; provided, however, that any medical and hospital insurance benefits
to which Employee may be entitled shall be at least at the same level as
required under clause (iii) of Section 6 hereof.
(b) TERMINATION WITH CAUSE. WG may terminate Employee's employment
for Cause at any time. "Cause" shall mean any one or more of the following: (i)
Employee's conviction of any Crime (as that term is defined herein), or a
pleading of "no contest" or guilty to such a Crime; (ii) Employee engaging in
intentional fraud or embezzlement against WG; or (iii) Employee's material
breach of any provision of this Contract, provided that if the act constituting
Cause is a material breach of any provision of this Contract (and is not also
described in clause (i) or (ii) of this sentence), then no such breach shall be
considered to be "Cause" if Employee cures such breach within thirty days from
the time Employee is given notice thereof. If Employee's employment is
terminated for Cause, Employer shall pay Employee's salary until the effective
date of termination of employment. Employer shall have no further obligation to
pay any other compensation or provide any other benefits other than those to
which Employee may be entitled pursuant to WG's plans and programs in effect at
that time; provided, however, that any medical and hospital insurance benefits
to which Employee may be entitled shall be at least at the same level as
required under clause (iii) of Section 6 hereof. For purposes of this Contract,
"Crime" shall mean: (i) any first, second or third degree offense under the New
Jersey Code of Criminal Justice (the "NJCCJ"); or (ii) any felony under Title 18
of United States Code; or (iii) an offense against a jurisdiction other than New
Jersey or the United States equivalent in kind and punishment to those
identified in clauses (i) or (ii) of this sentence.
(c) TERMINATION WITHOUT CAUSE. WG may terminate Employee's
employment without Cause at any time with 90 days' prior written notice. Any
Termination without Cause shall be effective only upon expiration of the 90-day
notice period. During the 90-day notice period, Employer shall continue paying
Employee's salary, and at the sole discretion of WG, Employee may continue to
perform the duties of the Position or he may cease performing such duties. At
the end of such 90-day notice period, Employer shall pay a portion of the
Incentive Compensation to which Employee would have been entitled for the
calendar year in which such termination is effective, pro-rated to the effective
date of such Termination without Cause. No later than 30 days from the effective
date of any such Termination without Cause, WG shall provide Employee with a
lump sum severance payment equal to one year's salary at the rate then in effect
minus any applicable withholding taxes. In addition, for a period of one year
after the effective date of such Termination without Cause, WG shall continue to
provide or pay: (a) the applicable premiums for all employee health, welfare and
fringe benefits provided to Employee under clause (iii) of Section 6 hereof
prior to the effective date of such Termination without Cause, and (b) the use
of an automobile pursuant to clause (v) of Section 6 hereof. The benefits
provided under clauses (a) and (b) of the previous sentence shall be at the same
level of coverage in effect on the Effective Date and in accordance with the
same terms as those that would have applied but for such Termination without
Cause. Upon the expiration of such one-year period, Employee shall be entitled
to elect continuation health insurance coverage pursuant to the Consolidated
Omnibus Budget Reconciliation Act ("COBRA"). Employer shall have no further
obligation to pay any other compensation or provide any benefits other than
those to which Employee may be entitled pursuant to WG's plans and programs in
effect on the effective date of any Termination without Cause; provided,
however, that any medical and hospital insurance benefits to which Employee may
be entitled, during both the one-year period after Termination without Cause and
during the COBRA period, shall be at least at the same level as required under
clause (iii) of Section 6 hereof.
(d) DEATH OR DISABILITY. In the event of Employee's death, this
Contract and all of WG's obligations pursuant hereto shall terminate without
notice. In the event of Employee's disability that prevents his performance of
the duties and obligations set forth in this Contract with or without reasonable
accommodation for a period of 180 consecutive or nonconsecutive days in any
12-month period, WG may terminate his employment upon 30 days' prior written
notice. In the event of termination due to death or disability, Employer shall
pay Employee's salary until the date of termination, and Employer shall pay a
portion of the Incentive Compensation to which Employee would have been entitled
for the calendar year in which such termination is effective, pro-rated to the
effective date of such termination. Employer shall have no further obligation to
pay any other compensation or provide any other benefits other than those to
which Employee may be entitled pursuant to WG's plans and programs in effect at
that time; provided, however, that any medical and hospital insurance benefits
to which Employee may be entitled shall be at least at the same level as
required under clause (iii) of Section 6 hereof.
(e) COMPENSATION UPON NONRENEWAL. In the event Employer does not
renew this Contract pursuant to Section 1 hereof, Employer shall continue paying
Employee's salary until the end of the term and Employer shall pay Employee a
portion of the Incentive Compensation to which Employee would have been entitled
for the calendar year in which such termination is effective, pro-rated to the
effective date of such termination. No later than 30 days from the expiration of
the term without renewal, WG shall provide Employee with a lump sum severance
payment equal to one year's salary at the rate then in effect. Employer shall
have no further obligation to pay any other compensation or provide any other
benefits other than those to which Employee may be entitled pursuant to WG's
plans and programs in effect at that time provided, however, that any medical
and hospital insurance benefits to which Employee may be entitled shall be at
least at the same level as required under clause (iii) of Section 6 hereof.
11. ENTIRE AGREEMENT; SEVERABILITY.
This Contract sets forth the entire understanding of the parties
with respect to the subject matter herein and may be modified only by a written
instrument duly executed by each party. The invalidity or unenforceability of
any provision of this Contract shall not affect the validity or enforceability
of any other provision.
12. NOTICES.
Any notice or other communication required or permitted to be given
hereunder shall be in writing and mailed by registered mail, return receipt
requested, or delivered against receipt to the party to which it is to be given
at the address of such party first above set forth or to such other address as
the party shall have furnished in writing in accordance with the provisions of
this Section 12. Any notice or other communication mailed by registered mail
shall be deemed received three days after mailing.
13. ASSIGNMENT.
In the event of a future disposition or transfer of all or
substantially all of the properties or business of WG, by merger, consolidation,
sale of stock or assets or otherwise, a condition of such disposition or
transfer shall be the assignment of this Contract and all of its rights and
obligations hereunder to the transferee or surviving entity. Such entity shall
assume in writing all of the obligations of WG hereunder; provided, however,
that WG shall remain liable for the performance of its obligations hereunder in
the event of any failure by the transferee or surviving entity to perform its
obligations. Employee's rights under this Contract shall not be transferable by
assignment or otherwise, shall not be subject to commutation or encumbrance and
shall not be subject to the claims of Employee's creditors.
14. BINDING EFFECT; INUREMENT.
This Contract shall be binding upon and inure to the benefit of WG
and its successors and those who are its assigns under Section 13.
15. GOVERNING LAW.
This Contract shall be governed by and construed in accordance with
the laws of the State of New Jersey, without giving effect to conflict of laws.
Any action to enforce the terms of this Contract shall be brought in the state
or federal courts in the State of New Jersey.
- SIGNATURE PAGE FOLLOWS -
IN WITNESS WHEREOF, the parties have duly executed this Contract as
of the date first above written.
XXXXXXX & XXXXX, INC.
By:______________________________
WG APPAREL, INC.
By:______________________________
XXXX X. XXXXXXX, XX.
