EXHIBIT 10.70
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT is made and effective as of the twenty-third
day of March, 1999, by and between TARRANT APPAREL GROUP, a California
corporation (the "Company"), and XXXXXXX GHAILIAN (the "Employee"), with respect
to the following facts:
The Company desires to be assured of the continued association and
services of the Employee in order to take advantage of his experience, knowledge
and abilities in the Company's business, and is willing to employ the Employee,
and the Employee desires to be so employed, on the terms and conditions set
forth in this Agreement.
ACCORDINGLY, on the basis of the representations, warranties and
covenants contained herein, the parties hereto agree as follows:
1. EMPLOYMENT
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1.1 Employment. The Company hereby employs the Employee as
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President of Chazzz Acquisition, L.L.C., a wholly-owned subsidiary of the
Company ("Chazzz"), and the Employee hereby accepts such employment, on the
terms and conditions set forth below, to perform during the term of this
Agreement such services as are required hereunder. Employee shall be
responsible for managing all sales recorded by Chazzz, including product of the
Company sold to customers of Chazzz (i.e., JC Penney - All except Men's sales;
Sears-All Sales; Xxxxxxxxxx Wards-All Sales; and Mervyns-All except Large Size
and Missy Wovens) plus all current customers of CMG, Inc. and knits (developed
and sold by Chazzz) for all customers.
1.2 Duties. The Employee shall render such services to the
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Company, and shall perform such duties and acts, as reasonably may be required
by the Company's Board of Directors in connection with any aspect of Chazzz's
business.
1.3 Performance of Duties.
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(a) The Employee shall devote such time, ability and attention to his
duties hereunder as may be necessary or advisable to discharge his duties
hereunder in a professional and businesslike manner and shall diligently and
conscientiously use his best efforts to further the Company's business.
(b) In connection with the Employee's employment by the Company, the
Employee shall be based in Los Angeles County, California.
(c) The Employee shall have the right to devote such time as may be
necessary to wind-down the business of CMG, Inc. prior to September 30, 1999;
provided, however, that no such activity shall have a material adverse effect on
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the Employee's performance of his obligations hereunder.
1.4 Trade Secrets. The Employee shall not, without the prior
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written consent of the Company's Board of Directors in each instance, disclose
or use in any way, either during his employment by the Company or thereafter,
except as required in the course of such employment, any confidential business
or technical information or trade secret of the Company acquired in the course
of such employment, whether or not patentable, copyrightable or otherwise
protected by law, and whether or not conceived of or prepared by him
(collectively, the "Trade Secrets"), including, without limitation, any
confidential information concerning customer lists, products, procedures,
operations, investments, financing, costs, employees, purchasing, accounting,
marketing, merchandising, sales, salaries, pricing, profits and plans for future
development, the identity, requirements, preferences, practices and methods of
doing business of specific parties with whom the Company transacts business, and
all other information which is related to any product, service or business of
the Company, other than information which is generally known in the industry in
which the Company transacts business or is acquired from public sources or was
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known to the Employee prior to the date hereof; all of which Trade Secrets are
the exclusive and valuable property of the Company.
1.5 Tangible Items. All files, accounts, records, documents,
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books, forms, notes, reports, memoranda, studies, compilations of information,
correspondence and all copies, abstracts and summaries of the foregoing, and all
other physical items related to the Company, other than a merely personal item,
whether of a public nature or not, and whether prepared by the Employee or not,
are and shall remain the exclusive property of the Company and shall not be
removed from the premises of the Company, except as required in the course of
employment by the Company, without the prior written consent of the Company's
Board of Directors in each instance, and the same shall be promptly returned to
the Company by the Employee on the expiration or termination of his employment
by the Company or at any time prior thereto upon the request of the Company.
1.6 Solicitation of Employees. During his employment by the
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Company and for one (1) year thereafter (such period not to include any period
of violation hereof by the Employee or period which is required for litigation
to enforce this paragraph and during which the Employee is in violation hereof),
the Employee shall not, directly or indirectly, either for his own benefit
purposes or the benefit of purposes of any other person employ or offer to
employ, call on, solicit, interfere with or attempt to divert or entice away any
employee or independent contractor of the Company (or any person whose
employment or status as an independent contractor has terminated within the
twelve (12) months preceding the date of such solicitation) in any capacity if
that person possesses or has knowledge of any Trade Secrets of the Company.
1.7 Injunctive Relief. The Employee hereby acknowledges and
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agrees that it would be difficult to fully compensate the Company for damages
resulting from the breach or threatened breach of Sections 1.4, 1.5 and 1.6 and,
accordingly, that the Company shall be entitled to temporary and injunctive
relief, including temporary restraining orders, preliminary injunctions and
permanent injunctions, to enforce such provisions without the necessity of
proving actual damages and without the necessity of posting any bond or other
undertaking in connection therewith. This provision with respect to injunctive
relief shall not, however, diminish the Company's right to claim and recover
damages.
2. COMPENSATION
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(a) As the total consideration for the services which the Employee
renders hereunder, the Employee shall be entitled to the following:
(i) an annual base salary of $480,000, subject to such
periodic increases, if any, as the Board of Directors may deem to be
appropriate in its sole discretion, less any applicable deduction
therefrom for income tax or other applicable withholdings, payable in
accordance with the Company's standard practices and procedures;
(ii) a bonus of $133,100 for the period from the date hereof
through December 31, 1999 if, but only if, Chazzz's net sales for such
period equal or exceed $39,500,000 and Chazzz's pre-tax income for
such period equals or exceeds 10% of Chazzz's net sales for such
period, payable as set forth in Section 2(c);
(iii) an annual bonus of $170,000 for each twelve-month
period ended on December 31, 2000 and 2001 if, but only if, Chazzz's
net sales and net income for such twelve-month period equals or
exceeds the amount set forth below, payable as set forth in Section
2(c):
Twelve Months Bonus Trigger Amounts
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Ended December 31, Net Sales Pre-tax Income
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(In millions)
2000 $60.0 $6.00
2001 72.0 7.20
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(iv) an additional bonus equal to 10% of Chazzz's pre-tax
income over $4,332,000 for the period from the date hereof through
December 31, 1999, payable as set forth in Section 2(c), and,
thereafter during the Term, such additional bonuses as to which the
Company and the Employee mutually may agree;
(v) reimbursement of any and all reasonable and documented
expenses (including, but not limited to, air fare, car rental,
lodging, meals, business telephone and related travel expenses)
incurred by the Employee from time to time in the performance of his
duties hereunder, which reimbursement shall be made in accordance with
the Company's policies and procedures as the same may be amended from
time to time;
(vi) four (4) weeks vacation taken in accordance with the
Company's standard policies and procedures;
(vi) participation in all plans or programs sponsored by the
Company for employees in general, including, but not limited to,
participation in any group health plan, medical reimbursement plan,
life insurance plan, pension and profit sharing plan, or stock option
plan; and
(vi) the right to purchase up to 36,000 shares of the Common
Stock of the Parent on the terms and conditions set forth on Exhibit
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A.
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(b) The term "net sales" shall mean all revenues (including
X.X. Xxxxxx - All except Men's sales, Sears - All sales,
Xxxxxxxxxx Wards - All sales, and Mervyn's - All except Large Size and
Missy Wovens), less returns, discounts and allowances, determined in
accordance with generally accepted accounting principles. The term
"pre-tax income" shall mean pre-tax income determined in accordance
with generally accepted accounting principles.
(c) The bonuses set forth in Sections 2(a)(ii), (iii) and (iv) shall
be advanced to the Employee within 45 days after the end of each calendar
quarter if and as earned. For purposes of this Section 2(c), the performance
targets in Sections 2(a)(ii), (iii) and (iv) shall be prorated for the period
commencing on the beginning of each test period to the end of each fiscal
quarter. In the event that the aggregate amount advanced to the Employee with
respect to the period from the date hereof through December 31, 1999 or the
twelve-month period ending December 31, 1999 or the twelve-month period ending
December 31, 2000 or 2001 shall exceed the amount to which the Employee is
entitled under Section 2(a), then the Employee shall reimburse the Company for
the amount of such overpayment promptly upon request.
3. TERM AND TERMINATION
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3.1 Term. Unless sooner terminated pursuant to Section 3.2
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hereof, the term of the Employee's relationship with the Company under Section
1.1 shall be for the period (the "Term") commencing on the date hereof and
ending on March 31, 2002.
3.2 At Will Relationship. The Employee and the Company each
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hereby acknowledges and agrees that, except as expressly set forth in Section
3.3, (i) the Employee's relationship with the Company under this Agreement is AT
WILL and can be terminated at the option of either the Employee or the Company
in his or its sole and absolute discretion, for any or no reason whatsoever,
with or without cause, (ii) no representations, warranties or assurances have
been made concerning the length of such relationship or the aggregate amount of
compensation to be received by the Employee and (iii) after the termination of
his employment by the Company, the Employee shall have no right, title or
interest in or claim to any revenues received by the Company from any person for
any goods sold or services rendered by the Company to such person, whether or
not the Employee was the cause, in whole or in part, for such person to purchase
such goods from the Company or to retain the Company to perform such services.
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3.3 Duties Upon Termination.
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(a) In the event that the Employee's employment by the Company under
this Agreement is terminated, neither the Company nor the Employee shall have
any remaining duties or obligations hereunder, except that (i) the Company shall
promptly pay to the Employee, or his estate, all reimbursable expenses incurred
by the Employee hereunder as of such date and such compensation as is due
pursuant to Section 2.1, prorated through the date of termination, and (ii) the
Employee shall continue to be bound by Sections 1.4, 1.5, 1.6 and 1.7; provided,
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however, that if Employee is terminated without cause, an additional $480,000
will be payable upon termination.
(b) The term "cause" shall mean (i) the willful and material breach of
this Agreement by the Employee which is not cured within 30 days of the
Employee's receipt of written notice from the Company describing in reasonable
detail the nature of such breach, (ii) fraud, misappropriation or embezzlement
or other act of material misconduct against the Company, (iii) conviction of or
a plea of nolo contendere to a felony involving moral turpitude, (iv) a charge
or indictment of a felony, the defense of which renders the Employee
substantially unable to perform his services hereunder, or (v) habitual neglect
to perform the Employee's duties if the Employee has failed to cure such neglect
within 30 days following receipt of written notice from the Company describing
in reasonable detail such neglect.
4. MISCELLANEOUS
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4.1 Severable Provisions. The provisions of this Agreement are
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severable, and if any one or more provisions may be determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions, and any
partially unenforceable provisions to the extent enforceable, shall nevertheless
be binding and enforceable.
4.2 Successors and Assigns. All of the terms, provisions and
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obligations of this Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and their respective heirs, representatives, successors
and assigns. Notwithstanding the foregoing, neither this Agreement nor any
rights hereunder shall be assigned, pledged, hypothecated or otherwise
transferred by the Employee without the prior written consent of the Company in
each instance.
4.3 Governing Law. The validity, construction and
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interpretation of this Agreement shall be governed in all respects by the laws
of the State of California applicable to contracts made and to be performed
wholly within that State.
4.4 Consent to Jurisdiction. Each party hereto, to the fullest
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extent it may effectively do so under applicable law, irrevocably (i) submits to
the exclusive jurisdiction of any court of the State of California or the United
States of America sitting in the City of Los Angeles over any suit, action or
proceeding arising out of or relating to this Agreement, (ii) waives and agrees
not to assert, by way of motion, as a defense or otherwise, any claim that it is
not subject to the jurisdiction of any such court, any objection that it may now
or hereafter have to the establishment of the venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum,
(iii) agrees that a final judgment in any such suit, action or proceeding
brought in any such court shall be conclusive and binding upon such party and
may be enforced in the courts of the United States of America or the State of
California (or any other courts to the jurisdiction of which such party is or
may be subject) by a suit upon such judgment and (iv) consents to process being
served in any such suit, action or proceeding by mailing a copy thereof by
registered or certified air mail, postage prepaid, return receipt requested, to
the address of such party specified in or designated pursuant to Section 4.7.
Each party agrees that such service (i) shall be deemed in every respect
effective service of process upon such party in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by law, be taken and
held to be valid personal service upon and personal delivery to such party.
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4.5 Headings. Section and subsection headings are not to be
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considered part of this Agreement and are included solely for convenience and
reference and in no way define, limit or describe the scope of this Agreement or
the intent of any provisions hereof.
4.6 Entire Agreement. This Agreement constitutes the entire
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agreement between the parties hereto pertaining to the subject matter hereof,
and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, relating to the subject matter of this
Agreement. No supplement, modification, waiver or termination of this Agreement
shall be valid unless executed by the party to be bound thereby. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.
Nothing in this Agreement shall impede the parties' exercise of their respective
rights under that certain Agreement for Purchase of Assets of even date
herewith, between the parties hereto, among others, or the other agreements
referred to therein.
4.7 Notices. Any notice or other communication required or
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permitted hereunder shall be in writing and shall be deemed to have been given
(i) if personally delivered, when so delivered, (ii) if mailed, one (1) week
after having been placed in the United States mail, registered or certified,
postage prepaid, addressed to the party to whom it is directed at the address
set forth below or (iii) if given by telex or telecopier, when such notice or
other communication is transmitted to the telex or telecopier number specified
below and the appropriate answerback or telephonic confirmation is received.
Either party may change the address to which such notices are to be addressed by
giving the other party notice in the manner herein set forth.
4.8 Attorneys' Fees. In the event any party takes legal action
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to enforce any of the terms of this Agreement, the unsuccessful party to such
action shall pay the successful party's expenses, including attorneys' fees,
incurred in such action.
4.9 Third Parties. Nothing in this Agreement, expressed or
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implied, is intended to confer upon any person other than the Company or the
Employee any rights or remedies under or by reason of this Agreement.
4.10 Construction. This Agreement was reviewed by legal counsel
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for each party hereto and is the product of informed negotiations between the
parties hereto. If any part of this Agreement is deemed to be unclear or
ambiguous, it shall be construed as if it were drafted jointly by the parties.
Each party hereto acknowledges that no party was in a superior bargaining
position regarding the substantive terms of this Agreement.
4.11 Arbitration. Any controversy arising out of or relating to
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this Agreement or the transactions contemplated hereby shall be referred to
arbitration before the American Arbitration Association strictly in accordance
with the terms of this Agreement and the substantive law of the State of
California. The board of arbitrators shall convene at a place mutually
acceptable to the parties in the State of California and, if the place of
arbitration cannot be agreed upon, arbitration shall be conducted in Los
Angeles. The parties hereto agree to accept the decision of the board of
arbitrators, and judgment upon any award rendered hereunder may be entered in
any court having jurisdiction thereof. Neither party shall institute a
proceeding hereunder until that party has furnished to the other party, by
registered mail, at least thirty (30) days prior written notice of its intent to
do so.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date and year first set forth above.
Company: TARRANT APPAREL GROUP
By /s/ Xxxx X. Xxxxxxx
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Authorized Representative
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
Employee: /s/ Xxxxxxx Ghailian
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XXXXXXX GHAILIAN
0000 Xxxx Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
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EXHIBIT A
TARRANT APPAREL GROUP
1997 EMPLOYEE INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
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This Stock Option Agreement ("Agreement") is made and entered into as
of the Date of Grant indicated below by and between Tarrant Apparel Group, a
California corporation (the "Company"), and the person named below
("Participant").
WHEREAS, Participant is an employee, director or independent
contractor of the Company or one or more of its subsidiaries; and
WHEREAS, pursuant to the Company's 1997 Employee Incentive Plan (the
"Plan"), the committee of the Board of Directors of the Company administering
the Plan (the "Committee") has approved the grant to Participant of an option to
purchase shares of the common stock of the Company (the "Common Stock"), on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
1. Grant Of Option; Certain Terms and Conditions.
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(a) The Company hereby grants to Participant, and Participant hereby
accepts, as of the Date of Grant, an option to purchase the number of shares of
Common Stock indicated below (the "Option Shares") at the Exercise Price per
share indicated below, which option shall expire at 5:00 p.m., California time,
on the Expiration Date indicated below and shall be subject to all of the terms
and conditions set forth in this Agreement (the "Option"). On each anniversary
of the Date of Grant, the option shall become exercisable to purchase, and shall
vest with respect to, that number of Option Shares (rounded to the nearest whole
share) equal to the total number of Option Shares multiplied by the Annual
Vesting Rate indicated below.
Participant: XXXXXXX GHAILIAN
Date of Grant: April 8, 1999
Number of shares purchasable: 36,000
Exercise Price per share: $39.96875
Expiration Date: April 8, 2009
Annual Vesting Rate: 33.333%
The Option is not intended to qualify as an incentive stock option under Section
422 of the Internal Revenue Code of 1986, as amended (an "Incentive Stock
Option").
(b) Notwithstanding anything to the contrary contained herein, in the
event the net sales or the pre-tax income of Chazzz Acquisition, Inc., a
Delaware limited liability company, (as determined by the Company) shall be
less than the amount set forth below for any period, then the right of the
Participant to purchase that number of Option Shares which first would have
become purchasable hereunder on the next succeeding anniversary of the Date of
Grant shall be deferred until the date ten business days before the Expiration
Date.
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Option Vesting Trigger
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Pretax
Period Net Sales Income
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(In millions)
03/23/99- $ 39.5 $ 3.95
12/31/99
01/01/00-
12/31/00 60.0 6.00
01/01/01- 72.0 7.20
12/31/01
2. Acceleration and Termination of Option.
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(a) Termination of Employment.
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(i) Death or Permanent Disability. If Participant shall cease to
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be an employee of the Company or any of its subsidiaries (such event shall
be referred to herein as the "Termination" of Employee's "Employment") by
reason of the death or Permanent Disability (as hereinafter defined) of
Participant, then (A) the portion of the Option that has not vested on or
prior to the date of such Termination of Employment shall terminate on such
date and (B) the remaining vested portion of the Option shall terminate
upon the earlier of the Expiration Date or the first anniversary of the
date of such Termination of Employment. "Permanent Disability" shall mean
the inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that can be
expected to result in death or that has lasted or can be expected to last
for a continuous period of not less than 12 months. Participant shall not
be deemed to have a Permanent Disability until proof of the existence
thereof shall have been furnished to the Board in such form and manner, and
at such times, as the Board may require. Any determination by the Board
that Participant does or does not have a Permanent Disability shall be
final and binding upon the Company and Participant.
(ii) Other Termination. If Participant's Employment is
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Terminated for no reason, or for any reason other than death or Permanent
Disability, then (A) the portion of the Option that has not vested on or
prior to the date of such Termination of Employment shall terminate on such
date and (B) the remaining vested portion of the Option shall terminate 90
days after the date of such Termination of Employment.
(b) Death Following Termination of Employment. Notwithstanding
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anything to the contrary contained in this Agreement, if Participant shall die
at any time after the Termination of his or her Employment and prior to the
Expiration Date, then (i) the portion of the Option that has not vested on or
prior to the date of such death shall terminate on such date and (ii) the
remaining vested portion of the Option shall terminate.
(c) Acceleration of Option. The Committee, in its sole discretion,
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may accelerate the exercisability of the Option at any time and for any reason.
(d) Termination of Option. Notwithstanding anything to the contrary
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contained in this Agreement, the Option shall terminate upon the consummation of
any of the following events, or, if later, the thirtieth day following the first
date upon which such event shall have been approved by both the Board and the
shareholders of the Company:
(i) the dissolution or liquidation of the Company; or
(ii) a sale of substantially all of the property and assets of
the Company, unless the terms of such sale shall provide otherwise.
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3. Adjustments. In the event that the outstanding securities of the
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class then subject to the Option are increased, decreased or exchanged for or
converted into cash, property or a different number or kind of securities, or
cash, property or securities are distributed in respect of such outstanding
securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, reclassification, dividend (other than a
regular cash dividend) or other distribution, stock split, reverse stock split
or the like, or in the event that substantially all of the property and assets
of the Company are sold, then, unless such event shall cause the Option to
terminate pursuant to Section 2(d) hereof, the Committee shall make appropriate
and proportionate adjustments in the number and type of shares or other
securities or cash or other property that may thereafter be acquired upon the
exercise of the Option; provided, however, that any such adjustments in the
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Option shall be made without changing the aggregate Exercise Price of the then
unexercised portion of the Option.
4. Exercise.
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(a) The Option shall be exercisable during Participant's lifetime only
by Participant or by his or her guardian or legal representative, and after
Participant's death only by the person or entity entitled to do so under
Participant's last will and testament or applicable intestate law. The Option
may only be exercised by (i) the delivery to the Company of a written notice of
such exercise, which notice shall specify the number of Option Shares to be
purchased (the "Purchased Shares") and the aggregate Exercise Price for such
shares (the "Exercise Notice"), together with payment in full of such aggregate
Exercise Price in cash or by check payable to the Company; provided, however,
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that payment of such aggregate Exercise Price may instead be made, in whole or
in part, by (i) the delivery to the Company of a certificate or certificates
representing shares of Common Stock, duly endorsed or accompanied by a duly
executed stock powers, which delivery effectively transfers to the Company good
and valid title to such shares, free and clear of any pledge, commitment, lien,
claim or other encumbrance (such shares to be valued on the basis of the
aggregate Fair Market Value (as defined below) thereof on the date of such
exercise), provided that the Company is not then prohibited from purchasing or
acquiring such shares of Common Stock, or (ii) the Participant authorizing a
third party to sell a portion of the Purchased Shares and remitting to the
Company a sufficient portion of the sale proceeds to pay the entire Exercise
Price and any tax withholding resulting from such exercise.
(b) The "Fair Market Value" of a Common Share on any date (the
"Determination Date") shall be equal to the closing price per Common Share on
the business day immediately preceding the Determination Date, as reported in
The Wall Street Journal, Western Edition, or, if no closing price was so
reported for such immediately preceding business day, the closing price for the
next preceding business day for which a closing price was so reported, or, if no
closing price was so reported for any of the 30 business days immediately
preceding the Determination Date, the average of the high bid and low asked
prices per Common Share on the business day immediately preceding the
Determination Date in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ")
or such other system then in use, or, if the Common Shares were not quoted by
any such organization on such immediately preceding business day, the average of
the closing bid and asked prices on such day as furnished by a professional
market maker making a market in the Common Shares selected by the Board.
5. Payment of Withholding Taxes. If the Company becomes obligated
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to withhold an amount on account of any tax imposed as a result of the exercise
of the Option, including, without limitation, any federal, state, local or other
income tax, or any F.I.C.A., state disability insurance tax or other employment
tax, then Participant shall, on the first day upon which the Company becomes
obligated to pay such amount to the appropriate taxing authority, pay such
amount to the Company in cash or by check payable to the Company. At the
election of the Participant, and subject to such rules as the Company may
establish, such withholding obligations may be satisfied through the surrender
of Common Shares which the Participant already owns or to which the Participant
otherwise is entitled under the Plan.
6. Notices. All notices and other communications required or
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permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed given if delivered personally or five days after mailing by certified
or registered mail, postage prepaid, return receipt requested, to the Company at
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Chief
Financial Officer, or to Participant at the address set forth beneath his or her
signature on the signature page hereto, or at such other addresses as they may
designate by written notice in the manner aforesaid.
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7. Stock Exchange Requirements; Applicable Laws. Notwithstanding
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anything to the contrary in this Agreement, no shares of stock purchased upon
exercise of the Option, and no certificate representing all or any part of such
shares, shall be issued or delivered if (i) such shares have not been admitted
to listing upon official notice of issuance on each stock exchange upon which
shares of that class are then listed or (ii) in the opinion of counsel to the
Company, such issuance or delivery would cause the Company to be in violation of
or to incur liability under any federal, state or other securities law, or any
requirement of any stock exchange listing agreement to which the Company is a
party, or any other requirement of law or of any administrative or regulatory
body having jurisdiction over the Company; provided, however, that the Company
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will use commercially reasonable efforts to cause such shares to be so listed
and such issuance and delivery to comply with any such law or requirement.
8. Transferability. Neither the Option nor any interest therein may
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be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than by will or the laws of descent and
distribution.
9. Plan. The Option is granted pursuant to the Plan, as in effect
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on the Date of Grant, and is subject to all the terms and conditions of the
Plan, as the same may be amended from time to time; provided, however, that no
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such amendment shall deprive Participant, without his or her consent, of the
Option or of any of Participant's rights under this Agreement. The
interpretation and construction by the Committee of the Plan, this Agreement,
the Option and such rules and regulations as may be adopted by the Committee for
the purpose of administering the Plan shall be final and binding upon
Participant. Until the Option shall expire, terminate or be exercised in full,
the Company shall, upon written request therefor, send a copy of the Plan, in
its then-current form, to Participant or any other person or entity then
entitled to exercise the Option.
10. Shareholder Rights. No person or entity shall be entitled to
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vote, receive dividends or be deemed for any purpose the holder of any Option
Shares until the Option shall have been duly exercised to purchase such Option
Shares in accordance with the provisions of this Agreement.
11. Employment or Contract Rights. No provision of this Agreement or
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of the Option granted hereunder shall (i) confer upon Participant any right to
continue in the employ of or contract with the Company or any of its
subsidiaries, (ii) affect the right of the Company and each of its subsidiaries
to terminate the employment or contract of Participant, with or without cause,
or (iii) confer upon Participant any right to participate in any employee
welfare or benefit plan or other program of the Company or any of its
subsidiaries other than the plan. Participant hereby acknowledges and agrees
that the Company and each of its subsidiaries may terminate the employment or
contract of Participant at any time and for any reason, or for no reason, unless
Participant and the Company or such subsidiary are parties to a written
employment or independent contractor agreement that expressly provides
otherwise. Governing Law. This Agreement and the Option granted hereunder shall
-------------------------
be governed by and construed and enforced in accordance with the laws of the
State of California without reference to choice or conflict of law principles.
IN WITNESS WHEREOF, the Company and Participant have duly executed
this Agreement as of the Date of Grant.
TARRANT APPAREL GROUP
By _____________________________________
Authorized Representative
PARTICIPANT
________________________________________
XXXXXXX GHAILIAN
0000 Xxxx Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
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