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EXHIBIT 10.65
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made this 15th day of February, 1991, by and between
Simplicity Holdings, Inc., a Delaware corporation ("Holdings") and Xxxxx X.
Xxxxxx ("Xxxxxx").
W I T N E S S E T H:
WHEREAS, Holdings is the owner of all the capital stock of Simplicity
Pattern Co. Inc., a Delaware corporation ("Pattern"), and desires to assure
itself and Pattern of the services of Xxxxxx; and
WHEREAS, Xxxxxx is willing to make his services available on the terms
and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual promises
contained in this Agreement, IT IS AGREED:
1. Employment. Holdings hereby employs Xxxxxx and Xxxxxx hereby
accepts employment with Holdings on the terms and conditions set forth in this
Agreement. The effective date of this Agreement (the "Effective Date") shall be
February 15, 1991.
2. Term. The term of Xxxxxx'x employment hereunder (the
"Employment Period") shall commence on the Effective Date and shall continue for
three years from such later date unless earlier terminated pursuant to Section 6
hereof.
3. Duties. Xxxxxx shall serve as the Senior Vice President -
Sales of Holdings and Pattern (hereinafter collectively referred to as the
"Simplicity Companies") and shall, under the direction of the respective Boards
of Directors thereof, faithfully and to the best of his ability perform the
duties appropriate to said office as assigned by the Boards of Directors of the
Simplicity Companies from time to time. Xxxxxx shall devote his entire working
time, energy, and skills to such employment while so employed.
4. Compensation. Xxxxxx'x compensation for the services performed
under this Agreement shall be as follows:
(a) Base Salary. Xxxxxx shall receive a base salary ("Base
Salary") aggregating One Hundred Forty Five Thousand Dollars ($145,000) per
year, payable in regular and equal semi-monthly installments. The Base Salary
shall be reviewed annually by the Board of Directors of Holdings or the
Simplicity Capital Corporation Compensation Committee and may be increased to
adequately reflect the scope and success of the Simplicity Companies'
operations.
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(b) Incentive Compensation. In addition to the Base Salary, Xxxxxx
shall be eligible to earn incentive compensation ("Incentive Compensation") as a
participant in Holding's incentive compensation plan ("Incentive Compensation
Plan") as approved by the Holdings' Board of Directors and in effect from time
to time.
5. Fringe Benefits.
(a) Generally. Without limiting any other provision, Xxxxxx shall
be entitled to the executive fringe benefits described on the Schedule of
Benefits attached hereto as Exhibit A.
(b) Vacation. Xxxxxx shall be entitled to four weeks of paid
vacation annually. Xxxxxx shall, in his reasonable discretion, determine the
time and intervals of such vacation.
(c) Reimbursement for Reasonable Business Expenses. Holdings shall
reimburse Xxxxxx for reasonable expenses incurred by him in connection with the
performance of his duties pursuant to this Agreement including, but not limited
to, entertainment expenses, travel expenses, expenses in connection with
seminars, professional conventions or similar professional functions, and other
reasonable business expenses.
(d) Automobile. During the Employment Period, Holdings shall cause
Pattern to pay Xxxxxx an annual automobile allowance of $550 per month, payable
in regular and equal semi-monthly installments subject to such reductions as may
be required by law.
(e) Management Benefit Plan. Xxxxxx shall be entitled to
participate in the Management Benefit Plan of Holdings' parent, Simplicity
Capital Corporation ("Capital"), and shall receive such benefits thereunder as
may be determined by Capital's Board of Directors or the appropriate committee
thereof.
6. Termination of Employment.
(a) Termination for Cause. Holdings shall be entitled to terminate
Xxxxxx'x employment at any time for Cause ("Termination for Cause") upon not
less than 60 days' written notice to Xxxxxx specifying the cause and the date of
termination. For the purposes of this Paragraph 6(a) and of Paragraph 6(b)
hereof, "Cause" shall mean that Xxxxxx was terminated for: gross negligence or
willful misconduct; willfully ceasing to perform normal and customary duties for
an extended period for any reason other than death or disability; fraud or
embezzlement in the course of employment; intentional disclosure of confidential
information; willfully engaging in competition or purposely aiding a competitor
of Holdings, Pattern, or any of Pattern's subsidiaries; misappropriation of a
material opportunity of Holdings, Pattern, or any of Pattern's subsidiaries; the
commission or conviction of a felony, or the entering of a plea of nolo
contendre in response to an indictment for a felony; or the commission or
conviction of any crime involving moral turpitude; or any willful
misrepresentation to any stockholder, officer, or director of Holdings, Pattern,
or any of Pattern's subsidiaries. No action by Xxxxxx shall be deemed willful
unless done in bad faith without reasonable belief that such action is in the
best interests of the Simplicity Companies.
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In the event of Termination for Cause, Holdings shall pay Xxxxxx his
Base Salary, Xxxxxx shall be entitled to receive his vested rights in all
pension and retirement plan benefits, and Xxxxxx shall receive the benefits
described in Exhibit A to this Agreement, prorated to the date of termination.
All other obligations of Holdings under this Agreement shall cease as of the
date of termination.
(b) Termination Without Cause. Xxxxxx'x employment may be
terminated without Cause ("Termination Without Cause") under any of the
following circumstances:
(i) by the Simplicity Companies on not less than 60 days'
written notice to Xxxxxx specifying the date of termination;
(ii) by reason of Xxxxxx'x death; and
(iii) by reason of Xxxxxx'x Disability.
For purposes of this Agreement, "Disability" means the inability of
Xxxxxx to perform his duties because of physical or mental disability, where
such disability shall exist for an aggregate of more than six months in any
12-month period or for any period of four consecutive months.
In the event of Termination Without Cause pursuant to Paragraph 6(b)(i)
hereof, Holdings shall pay Xxxxxx his Base Salary and Incentive Compensation as
set forth in Section 4 hereof for the full term of this Agreement as set forth
in Section 2 hereof, and Xxxxxx shall be entitled to all benefits described in
items a, b, c, and d of the Schedule of Benefits attached as Exhibit A to this
Agreement for the full term of this Agreement as set forth in Section 2 hereof.
In the event of Termination Without Cause pursuant to Paragraph
6(b)(ii) or (iii) hereof, Holdings shall pay Xxxxxx, or his estate, his Base
Salary and Incentive Compensation through the date of such termination and in
respect of Termination Without Cause pursuant to Paragraph 6(b)(iii) hereof,
Xxxxxx shall be entitled to all benefits described in items a, b, c, and d of
the Schedule of Benefits attached as Exhibit A to this Agreement for the full
term of this Agreement as set forth in Section 2 hereof. All other obligations
of Holdings under this Agreement shall cease as of the date of termination. In
the event of Termination Without Cause there shall be no obligation for Xxxxxx
to seek other employment or otherwise mitigate such payments and in the event
Xxxxxx obtains other employment, Holdings shall continue to pay the amounts and
benefits payable to Xxxxxx under this Agreement.
(c) Voluntary Termination.
(i) Xxxxxx shall be entitled to terminate his employment
at any time ("Voluntary Termination") upon not less than 60 days' written notice
specifying the date of termination. In the event of such Voluntary Termination,
Holdings shall pay Xxxxxx his Base Salary through the date of such termination.
In addition, Xxxxxx shall be entitled to receive his vested rights, if any, in
all pension and retirement plan benefits. All other obligations of Holdings
under this Agreement shall cease as of the date of termination.
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(ii) Xxxxxx shall also be entitled to terminate his
employment at any time for Cause on not less than 60 days' written notice to
Holdings specifying the Cause and the date of termination. For the purposes of
this Paragraph 6(c)(ii), "Cause" shall mean a material breach by Holdings of
this Agreement that is not cured within 30 days after written notice thereof is
given by Xxxxxx to each member of the Board of Directors of Holdings. If Xxxxxx
terminates his employment for Cause under this Paragraph 6(c)(ii), Xxxxxx shall
have all of the rights and benefits to which he would have been entitled if
employment were being terminated under Paragraph 6(b)(i). All other obligations
of Holdings under this Agreement shall cease as of the date of termination. In
the event that Holdings disputes Xxxxxx'x assertion that a material breach of
this Agreement by Holdings has occurred, Holdings shall so advise Xxxxxx within
two weeks of receipt by it of the above-mentioned notice from Xxxxxx and the
matter shall be resolved in accordance with Section 20 of this Agreement.
7. Noncompetition.
(a) During Term of Employment. During the term of his employment
Xxxxxx shall not, directly or indirectly, either individually or as an employee,
agent, partner, shareholder, consultant, or in any other capacity participate
in, engage in, or have a financial or other interest in any business that is
competitive with the Simplicity Companies or any of their subsidiaries or any
successor or assign thereof. The ownership of an interest constituting not more
than 1% of the outstanding debt or equity in a corporation the shares of which
are traded on a recognized stock exchange or traded in the over-the-counter
market, even though that corporation may be a competitor of the Simplicity
Companies or any of their subsidiaries, shall not be deemed financial
participation in a competitor.
(b) Upon Termination of Employment. In the event Xxxxxx'x
employment hereunder is terminated, Xxxxxx shall not, without the written
consent of Holdings during the greater of (i) the twelve-month period following
the termination date and (ii) the balance of Xxxxxx'x term of employment
described in Section 2 hereof directly or indirectly, individually or as an
employee, agent, partner, shareholder, consultant, or in any other capacity,
participate in, engage in, or have a financial interest or management position
or other interest in any business operation or any enterprise if such operation
or enterprise engages in the sewing pattern business or solicit any other person
to engage in any of the foregoing activities. The ownership of an interest
constituting not more than 1% of the outstanding debt or equity in a corporation
the shares of which are traded on a recognized stock exchange or traded in the
over-the-counter market, even though that corporation may be a competitor of the
Simplicity Companies or any of their subsidiaries, shall not be deemed financial
participation in a competitor.
8. Confidentiality. In the course of his employment hereunder
Xxxxxx will have access to confidential information and records, data,
specifications and other trade secrets of Pattern and its affiliates and
subsidiaries including, without limitation, information relating to its
customers, marketing arrangements, and sales plans ("Confidential Information").
During and after his employment, Xxxxxx shall not directly or indirectly
disclose Confidential Information to any person or use any Confidential
Information, except as required in the course of such employment. All records,
files, drawings, documents, models, equipment, and the like relating
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to the Simplicity Companies or any of their subsidiaries' business Xxxxxx shall
prepare or use or come into contact with, shall be and remain such company's
sole property and shall not be removed from such company's premises without its
written consent, except as required in the course of such employment.
9. Specific Performance. In the event of any breach of any
provision of this Agreement, including without limitation, Sections 7 and 8
hereof, the non-breaching party shall be entitled to seek a decree of specific
performance thereof against the breaching party. Such remedy, however, shall be
cumulative and nonexclusive and shall be in addition to any other remedy to
which the parties may be entitled.
10. Sale, Consolidation or Merger. In the event of a sale,
consolidation, or merger, the successor-in-interest to Holdings shall be deemed
to have assumed all liabilities of Holdings under this Agreement, but this
corporation shall not be released thereby from such liabilities.
11. Waiver. The failure of any party to insist, in any one or more
instances, upon performance of the terms, covenants, or conditions of this
Agreement shall not be construed as a waiver or a relinquishment of any right
granted hereunder or of the future performance of any such term, covenant, or
condition.
12. Withholding. Amounts paid to Xxxxxx under this Agreement shall
be subject to appropriate required withholding, if any.
13. Notices. Any notice to be given hereunder shall be deemed
sufficient if addressed in writing, and delivered by registered or certified
mail or delivered personally, in the case of Holdings to its principal business
office and in the case of Xxxxxx, to his address appearing on the records of
Holdings or to such other address as he may designate in writing to Holdings.
14. Severability. In the event that any provision shall be held to
be invalid or unenforceable for any reason whatsoever, it is agreed such
invalidity or unenforceability shall not affect any other provision of this
Agreement and the remaining covenants, restrictions and provisions hereof shall
remain in full force and effect and any court of competent jurisdiction may so
modify the objectionable provision as to make it valid, reasonable and
enforceable.
15. Amendment. This Agreement may be amended only by an agreement
in writing signed by the parties hereto.
16. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York.
17. Coverage. The provisions set forth in this Agreement with
respect to the terms and conditions of Xxxxxx'x employment will not prevent
Xxxxxx from participating in any other employee compensation or benefit program
adopted by any of the Simplicity Companies for their key employees solely
because such programs are not specifically mentioned in this Agreement.
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18. Benefit. This Agreement shall be binding upon and inure to the
benefit of and shall be enforceable by and against Holdings, its successors and
assigns, and Xxxxxx, his heirs, beneficiaries and legal representatives. It is
agreed that the rights and obligations of Xxxxxx may not be delegated or
assigned except as specifically set forth in this Agreement.
19. Entire Agreement. This Agreement contains the entire agreement
of the parties with respect to Xxxxxx'x employment by Holdings and supersedes
any prior agreements between them, whether oral or written.
20. Arbitration. If Xxxxxx receives a notice from Holdings under
Paragraph 6(c)(ii) hereof to the effect that it disagrees with an assertion by
Xxxxxx that a breach of this Agreement by Holdings has occurred, Holdings may
elect to have the matter settled by arbitration in New York in accordance with
the rules and regulations of the American Arbitration Association then in
effect. If Xxxxxx'x position is upheld in such arbitration Holdings shall pay
Xxxxxx'x costs of arbitration.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed as of the day, month and year first above written.
SIMPLICITY HOLDINGS, INC.
By: /s/Xxxxx X. Xxxxx
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Its: Senior Vice President and CFO
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/s/Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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EXHIBIT A
SCHEDULE OF BENEFITS
In accordance with Section 5 of the Agreement, Xxxxxx shall receive
those fringe benefits that are made available to other executives of Holdings
including the following:
a. Life insurance - Assuming that Xxxxxx will make himself
available for a physical examination and is insurable, Xxxxxx
will receive life insurance coverage in an amount commensurate
with that provided executive officers of Holdings having
similar status and Base Salary.
b. Medical and dental insurance - Xxxxxx and his dependents may
participate in Holdings' group plan on a contributory basis.
x. Xxxxxx shall be entitled to participate in the Simplicity
Retirement Savings Plan as of February 1, 1991.
d. Long-term disability coverage through the Holdings' group
plan.
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