Exhibit 10.30
SEVERANCE AGREEMENT
This Severance Agreement is made and entered into as of January 15, 2000,
by and between Designs, Inc. (the "Company"), a corporation organized and
existing under the laws of Delaware with a principal place of business at 00 X
Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000, and Xxxxxxx Xxxxxxxx ("Xxxxxxxx"), an
individual residing at 000 Xxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxxxxxxxxxx 00000.
WHEREAS, the Company and Xxxxxxxx are parties to an Employment Agreement
dated as of May 9, 1997 (the "Employment Agreement") whereby Xxxxxxxx was
employed as Vice President and Chief Financial Officer of the Company, which
agreement expires May 8, 2000; and
WHEREAS, the Company and Xxxxxxxx agree to terminate the Employment
Agreement on the terms and conditions hereinafter set forth and establish the
terms of Xxxxxxxx'x xxxxxxxxx arrangement.
NOW THEREFORE, in consideration of the promises and conditions set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Resignation. In consideration of the terms and conditions of this
Severance Agreement, Xxxxxxxx hereby tenders her resignation to the Company
effective as of January 15, 2000 (the "Resignation Date"), and the Company
accepts her resignation to be effective on the Resignation Date. From and after
the Resignation Date, Xxxxxxxx shall no longer be an employee of the Company and
shall have no further duties or responsibilities on behalf of the Company except
as provided herein.
2. Severance Payments. The Company shall pay Xxxxxxxx the aggregate sum of
Four Hundred Twenty Thousand Dollars and No Cents ($420,000.00) (the "Severance
Payment"), in accordance with the attached Payment Schedule. Payments shall be
made by direct deposit to Xxxxxxxx'x account and are deemed paid on the date the
deposits are
made. Xxxxxxxx shall be liable for, and shall pay in full when due, any and all
local, state and federal income taxes related to the Severance Payment. Xxxxxxxx
will receive a Form 1099 from the Company at the end of each calendar year.
3. Medical/Dental Insurance. To the extent participation is permitted by
the terms of the applicable insurance policies and plans, the Company shall
continue to provide Xxxxxxxx with family medical and dental insurance coverage
through July 31, 2000, on the same terms and conditions that it provides such
coverage to its employees. Thereafter, Xxxxxxxx shall be entitled to apply for
and receive continuation of medical insurance coverage at her sole cost and
expense until January 31, 2002, consistent with and subject to the provisions of
COBRA. While under COBRA an employee who terminates employment generally is
eligible to elect to continue his or her health coverage for up to 18 months
from either the employment termination date or, as here, the date of loss of
coverage if later, Xxxxxxxx and the Company acknowledge that there are
exceptions under COBRA to this general rule. Xxxxxxxx'x current costs for the
family medical and dental insurance coverage for the period from January 15,
2000 until July 31, 2000 is set forth on the attached Payment Schedule and the
costs shall be deducted from the Severance Payment due to Xxxxxxxx from the
Company. In the event Xxxxxxxx is employed by any person or entity after the
Resignation Date, she shall obtain family medical and dental insurance coverage
through her new employer as soon as possible under the terms of the applicable
plans and the Company shall be released from its obligations under this section
to provide any such coverage, including coverage pursuant to COBRA. Xxxxxxxx
shall notify the Company of the commencement of such new coverage within 10 days
of the commencement date.
4. Vehicle. Xxxxxxxx may retain possession of the 1997 BMW 528 vehicle
currently leased by the Company and used by Xxxxxxxx for the remainder of the
original lease term, which expires in July 2000. The Company shall continue to
pay the lease payments and insurance costs on the vehicle until the expiration
of the original lease term. However, after the Resignation Date, Xxxxxxxx shall
be responsible for, at her sole cost and expense, all operating, repair and
maintenance costs and any other costs related to the use and operation of the
vehicle. Upon expiration of the lease, Xxxxxxxx shall have the option of
purchasing the vehicle pursuant to the terms of the lease, if permitted under
the lease,
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and shall pay all costs related to the purchase. In the event Xxxxxxxx does not
purchase the vehicle upon expiration of the lease, she shall immediately return
the vehicle to the lessor in good repair and condition, normal wear and tear
excepted. Any and all security deposits shall remain the property of the Company
and shall be returned to the Company upon expiration of the lease. With the
exception of the monthly lease payments, upon expiration of the vehicle lease,
Xxxxxxxx shall pay any and all costs due to the lessor.
5. Benefits and Perquisites. The Company shall reimburse Xxxxxxxx for all
business and automobile repair and gasoline expenses reasonably incurred by her
through the Resignation Date in connection with her work as an employee of the
Company, including without limitation all travel expenses, in accordance with
the Company's policies applicable to its senior executives and upon submission
of appropriate documentation thereof.
6. Legal Fees. In the event either party breaches any such party's
obligations under this Severance Agreement, the non-breaching party shall be
entitled to recover all reasonable costs incurred by such non-breaching party in
enforcing the terms of the Severance Agreement, including reasonable attorneys'
fees. The prevailing party shall be entitled to recover its reasonable
attorney's fees and expenses in any litigation that arises out of or relates to
this Severance Agreement.
7. Options. Xxxxxxxx hereby acknowledges and agrees that any and all
incentive stock options, non-qualified stock options and/or any other stock
options granted to her during her employment at the Company shall expire and/or
terminate as of the Resignation Date.
8. Continued Cooperation. Without further consideration, Xxxxxxxx agrees
that she shall be reasonably available upon request to consult with and assist
the Company in the current Internal Revenue Service Audits, which shall include
but is not limited to testifying at any deposition, hearing, proceeding or trial
and meeting with representatives of the Company and/or Internal Revenue Service
to discuss the factual history of such matters, and assist in connection with
the transition of other financial matters, provided that Xxxxxxxx shall not be
required to devote a major portion of her time to such services and such
services shall not unreasonably interfere with the performance of other
employment or consulting duties Xxxxxxxx may have.
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9. References. All responses to any inquiries made to the Company or to
any agent or consultant for the Company regarding employment references for
Xxxxxxxx shall be limited to providing dates of employment, title and salary
information. If additional information is requested, the Company may state that
the foregoing information is the only information that the Company can provide
or words to that effect.
10. Non-disparagement. Xxxxxxxx agrees that she will not make any public
or private statement which criticizes or disparages the Company or its officers,
directors, employees or consultants and will use her best efforts to have her
agents comply with this provision.
11. Confidentiality. Xxxxxxxx agrees that she will treat the terms and
conditions of this Severance Agreement as confidential and that she will not
disclose said terms and conditions to any person or entity, except to her
immediate family, as required by law, to enforce the terms hereof and/or as
necessary to her personal financial and legal advisors. In the event Xxxxxxxx
discloses any of the terms and conditions of this Severance Agreement to any of
the foregoing persons or entities, she shall advise them that the terms and
conditions of this Severance Agreement are confidential and that they shall not
be disclosed to any other person or entity. Xxxxxxxx acknowledges and agrees
that the disclosure of this Severance Agreement and/or the material terms
thereof will likely be required by the Company in its filings with the
Securities and Exchange Commission.
12. Non-Disclosure.
(a) Xxxxxxxx agrees that she will not disclose to any person or
entity, either orally or in written form, except as required by law, any
confidential information relating to the Company or any of its
subsidiaries and affiliates, the directors of the Company or its
subsidiaries and affiliates, any client of the Company or any of its
subsidiaries and affiliates, or any corporation, partnership or other
entity owned or controlled, directly or indirectly, by any of the
foregoing, or in which any of the foregoing has a beneficial interest,
including, but not limited to, the business affairs of each of the
foregoing. Such confidential information shall include, but shall not be
limited to, proprietary technology, trade secrets, patented processes,
research and development data, know-how, market studies and forecasts,
competitive analyses, pricing policies, employee lists, personnel
policies, the
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substance of agreements with customers, suppliers and others, marketing or
dealership arrangements, servicing and training programs and arrangements,
customer lists and any other documents, including copies of such
information in electronic form, embodying such confidential information.
(b) The non-disclosure obligation set forth above shall not apply to
any information (i) which was in the public domain at the time of
disclosure or (ii) which thereafter fell into the public domain without
any fault of Xxxxxxxx and which was not disclosed in violation of any
similar non-disclosure obligation by any other person.
(c) On or before the Resignation Date, Xxxxxxxx shall leave with the
Company all documents, computer disks, records, reports, writings and
other similar documents containing confidential information, including
copies thereof then in Xxxxxxxx'x possession or control, except those
documents which are Xxxxxxxx'x personal copies of documents relating to
the terms and conditions of her employment with or resignation from the
Company. Xxxxxxxx represents that, as of the Resignation Date, she has
returned to the Company all other assets and/or property belonging to the
Company.
13. Non-Competition and Non-Solicitation.
(a) Xxxxxxxx agrees that during the period commencing on the
Resignation Date and ending on January 31, 2002, she shall not work for
Levi Xxxxxxx & Co., and she shall not, directly or indirectly, as owner,
partner, joint venturer, stockholder, employee, broker, agent, principal,
trustee, corporate officer, director, licensor, or in any capacity
whatsoever, engage or assist any person or entity to engage in the Levi's
or Dockers outlet business in any location in any geographic area in the
United States or Puerto Rico; provided, however, that Xxxxxxxx may own any
securities of any corporation which is engaged in such business and is
publicly owned and traded but in an amount not to exceed at any one time
one percent (1%) of any class of stock or securities of such corporation.
(b) During the period commencing on the Resignation Date and ending
on January 31, 2002, Xxxxxxxx shall not request any suppliers or customers
with whom the Company has a business relationship to cancel or terminate
any such
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business relationship with the Company or solicit any employee of the
Company to leave the Company's employ. Notwithstanding the foregoing,
nothing contained herein shall constitute the Company's approval or
acquiescence of any actions taken by Xxxxxxxx after January 31, 2002 to
seek to cause the cancellation or termination of any business relationship
between the Company and any third party and the Company reserves the right
to assert claims against Xxxxxxxx arising out of her conduct.
14. Xxxxxxxx Release. Xxxxxxxx hereby voluntarily and irrevocably releases
and forever discharges the Company and its subsidiaries (including their
successors and assigns) and each of their current and former officers,
directors, shareholders, employees, consultants, representatives and agents
(hereinafter the "Company Releasees") from any and all charges, complaints,
claims, promises, agreements, actions, obligations, causes of action, damages,
and debts (including attorneys' fees and costs actually incurred), known or
unknown, which Xxxxxxxx has, had, or hereinafter may have, directly or
indirectly, from the beginning of the world to the day of the date of this
Severance Agreement, including, without limitation, all claims related to or
arising out of any conduct pertaining to the most recent proxy contest, consent
solicitation and/or annual meeting of the Company, all claims related to or
arising out of her employment with or services performed for the Company, all
claims for breach of contract, all claims arising out of or relative to
Xxxxxxxx'x employment with the Company and the termination thereof and any
claims Xxxxxxxx may have under the Employment Agreement, all claims for breach
of an implied covenant of good faith and fair dealing, all claims for
intentional or negligent misrepresentation, all claims relating to any acts or
omissions by the Company Releasees, and all claims for unlawful discrimination
under the common law or any statute (including, without limitation, Title VII of
the Civil Rights Act of 1964, 42 U.S.C. ss.2000e, et seq., the Age
Discrimination in Employment Act of 1967, 29 U.S.C.ss.621, et seq., the Employee
Retirement Income Security Act, 29 U.S.C.ss.1001, et seq, and the Americans with
Disabilities Act of 1990, 42 U.S.C.ss.12101, et seq.) Notwithstanding the
foregoing, this release shall not release or limit Xxxxxxxx'x rights to
indemnification under the terms of the By-Laws of the Company and under the
Indemnification Agreement between Xxxxxxxx and
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the Company dated as of December 10, 1998, as in effect on the date hereof, or
to enforce this Severance Agreement or bring claims for breach thereof.
15. Company Release. The Company, on behalf of itself and its officers,
directors, agents, representatives, subsidiaries, consultants and shareholders
(hereinafter the "Company Releasors") hereby voluntarily and irrevocably
releases and forever discharges Xxxxxxxx and her heirs and survivors from any
and all charges, complaints, claims, promises, agreements, obligations, causes
of action, damages and debts, (including attorneys' fees and costs actually
incurred), known or unknown, that the Company Releasors, individually or
jointly, have, had or hereinafter may have, directly or indirectly, from the
beginning of the world to the day of the date of this Severance Agreement,
including, without limitation, all claims for breach of contract, relating to or
arising out of any conduct pertaining to the most recent proxy contest, consent
solicitation and/or annual meeting of the Company or relating to or arising out
of Xxxxxxxx'x employment with or services performed for the Company, all claims
for breach of an implied covenant of good faith and fair dealing, all claims for
intentional or negligent misrepresentation, mismanagement, nondisclosure, or any
acts or omissions by Xxxxxxxx during the course of her employment or any claims
the Company may have under the Employment Agreement. Notwithstanding the
foregoing, this release shall not release or limit the Company's rights to
enforce this Severance Agreement or to bring any claims for breach thereof.
16. Arbitration of Disputes. Any controversy or claim arising out of or
relating to this Severance Agreement or the breach thereof shall, to the fullest
extent permitted by law, be settled by arbitration in any forum and form agreed
upon by the parties or, in the absence of such an agreement, under the auspices
of the American Arbitration Association ("AAA") in Boston, Massachusetts, in
accordance with the rules of the AAA, including, but not limited to, the rules
and procedures applicable to the selection of arbitrators. Judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. This Section 16 shall be specifically enforceable. Notwithstanding the
foregoing, this Section 16 shall not preclude either party from pursuing a court
action for the sole purpose of obtaining a temporary restraining order or a
preliminary injunction in circumstances in which such relief is appropriate;
provided, however, that any other relief shall be pursued through an arbitration
proceeding pursuant to this Section 16.
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17. Trust Agreement. Xxxxxxxx hereby relinquishes any and all rights,
title and interest that she had, has or may have in, arising out of or relating
to the Trust Agreement ("Trust Agreement") made as of May 12, 1999 by and
between the Company and State Street Bank and Trust Company ("State Street") or
the assets held thereunder. Xxxxxxxx agrees and consents to the termination of
the Trust Agreement and the return of all trust assets by State Street to the
Company and shall execute any and all documents necessary to accomplish the
termination and return of trust assets. If Xxxxxxxx fails to execute the
foregoing documents within forty eight (48) hours after receipt of a written
request from the Company, the Company can suspend the payments of the Severance
Payment until Xxxxxxxx executes such documents. Notwithstanding the foregoing,
this provision shall not release or limit Xxxxxxxx'x rights to indemnification
under the terms of the By-Laws of the Company and under the Indemnification
Agreement between Xxxxxxxx and the Company dated as of December 10, 1998, as in
effect on the date hereof.
18. Nature of Agreement. Xxxxxxxx and the Company acknowledge and agree
that this Severance Agreement is a severance and settlement agreement and shall
not constitute an admission of liability and wrongdoing on the part of either
party.
19. Notices. All notices, requests, demands, and other communications
provided for by this Severance Agreement shall be sufficient if in writing and
delivered in person or sent by registered or certified mail, postage prepaid, to
the other party at the address first above written, or at such other address as
to which the party gives notice, with a copy to:
For the Company: Designs, Inc.
00 X Xxxxxx
Xxxxxxx, XX 00000
Attention: Corporate Counsel
and
Xxxxx Xxxxx, Esq.
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-00000
For Xxxxxxxx: Xxxxxx Xxx XxXxxx, Esq.
Xxxxxxxx Xxxxxxxxx & XxXxxx
Xxx Xxxx Xxxxx
Xxxxxx, XX 00000
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20. Entire Agreement. This Severance Agreement is the entire agreement
between the parties relating to the subject matter hereof. The Employment
Agreement shall terminate effective as of January 15, 2000, at which time it
shall become null and void.
21. Voluntary Assent. Xxxxxxxx and the Company affirm that no other
promises or agreements of any kind have been made to or with them by any person
or entity whatsoever to cause them to sign the Severance Agreement, and that
they fully understand the meaning and intent of this Severance Agreement.
Xxxxxxxx and the Company state and represent that they have had an opportunity
to fully discuss and review the terms of this Severance Agreement with an
attorney, that they have read this Severance Agreement carefully and understand
the contents hereof, that they freely and voluntarily assent to all of the terms
and conditions hereof and that they sign their name of their own free act.
22. Binding Effect. This Severance Agreement shall inure to the benefit of
and be binding upon the Company and Xxxxxxxx, their respective successors,
executors, administrators, heirs and permitted assigns.
23. Amendment. This Severance Agreement may be amended or modified only by
a written instrument signed by Xxxxxxxx and a duly authorized representative of
the Company.
24. Severability. In case any provisions of this Severance Agreement shall
be determined by an arbitrator or court of competent jurisdiction to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Severance Agreement shall not in any way be
affected or impaired thereby.
25. Future Cooperation. At any time after execution and exchange of this
Severance Agreement and from time to time, Xxxxxxxx and the Company, upon
written request from either party to the other, shall execute and deliver such
further documents or instruments as may be reasonably necessary to more fully
effectuate the intention of the parties hereto but limited to such
amplification, definition or effectuation strictly consistent with the terms and
provisions hereof.
26. Applicable Law. This Severance Agreement shall be governed by the laws
of the Commonwealth of Massachusetts.
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27. Opportunity to Consider; Revoke. Xxxxxxxx acknowledges that she has
been afforded an opportunity to take at least twenty-one (21) days to consider
this Severance Agreement and has been advised to consult with the attorneys of
her choice prior to executing this Severance Agreement. Xxxxxxxx acknowledges
that she has had an adequate opportunity to review this Severance Agreement
before its execution. The parties understand and acknowledge that Xxxxxxxx will
have a period of seven (7) calendar days following her execution of this
Severance Agreement in which to revoke her consent to this Severance Agreement.
Such revocation must be in writing and shall be transmitted to the Company such
that it is actually received prior to the expiration of the seven-day revocation
period.
28. Counterparts. This Severance Agreement may be executed in two (2)
signature counterparts, each of which shall constitute an original, but all of
which taken together shall constitute one and the same instrument.
Executed as a sealed document as of the date and year first written above.
DESIGNS, INC.
By: /s/ Xxxx X. Xxxxxxx /s/ Xxxxxxx Xxxxxxxx
Its: Chief Executive Officer Xxxxxxx Xxxxxxxx
Hereunto duly authorized
By: /s/ Xxxxxxx X. Xxxxx
Its: Vice President of Corporate Development
Hereunto duly authorized
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Xxxxxxx Xxxxxxxx Xxxxxxxxx Payment Schedule
Payment Insurance Deduction BI-Weekly Payment
28-Jan 2000 $ 8,400.00 $ 124.20 $ 8,275.80
4-Feb 2000 $ 8,400.00 $ 90.45 $ 8,309.55
18-Feb 2000 $ 8,400.00 $ 90.45 $ 8,309.55
3-Mar 2000 $ 8,400.00 $ 90.45 $ 8,309.55
17-Mar 2000 $ 8,400.00 $ 90.45 $ 8,309.55
31-Mar 2000 $ 8,400.00 $ 8,400.00
14-Apr 2000 $ 8,400.00 $ 90.45 $ 8,309.55
28-Apr 2000 $ 8,400.00 $ 90.45 $ 8,309.55
12-May 2000 $ 8,400.00 $ 90.45 $ 8,309.55
26-May 2000 $ 8,400.00 $ 90.45 $ 8,309.55
9-Jun 2000 $ 8,400.00 $ 90.45 $ 8,309.55
23-Jun 2000 $ 8,400.00 $ 90.45 $ 8,309.55
7-Jul 2000 $ 8,400.00 $ 90.45 $ 8,309.55
21-Jul 2000 $ 8,400.00 $ 90.45 $ 8,309.55
4-Aug 2000 $ 8,400.00 $ 8,400.00
18-Aug 2000 $ 8,400.00 $ 8,400.00
1-Sep 2000 $ 8,400.00 $ 8,400.00
15-Sep 2000 $ 8,400.00 $ 8,400.00
29-Sep 2000 $ 8,400.00 $ 8,400.00
13-Oct 2000 $ 8,400.00 $ 8,400.00
27-Oct 2000 $ 8,400.00 $ 8,400.00
10-Nov 2000 $ 8,400.00 $ 8,400.00
24-Nov 2000 $ 8,400.00 $ 8,400.00
8-Dec 2000 $ 8,400.00 $ 8,400.00
22-Dec 2000 $ 8,400.00 $ 8,400.00
5-Jan 2001 $ 8,400.00 $ 8,400.00
19-Jan 2001 $ 8,400.00 $ 8,400.00
2-Feb 2001 $ 8,400.00 $ 8,400.00
16-Feb 2001 $ 8,400.00 $ 8,400.00
2-Mar 2001 $ 8,400.00 $ 8,400.00
16-Mar 2001 $ 8,400.00 $ 8,400.00
30-Mar 2001 $ 8,400.00 $ 8,400.00
13-Apr 2001 $ 8,400.00 $ 8,400.00
27-Apr 2001 $ 8,400.00 $ 8,400.00
11-May 2001 $ 8,400.00 $ 8,400.00
25-May 2001 $ 8,400.00 $ 8,400.00
8-Jun 2001 $ 8,400.00 $ 8,400.00
22-Jun 2001 $ 8,400.00 $ 8,400.00
6-Jul 2001 $ 8,400.00 $ 8,400.00
20-Jul 2001 $ 8,400.00 $ 8,400.00
3-Aug 2001 $ 8,400.00 $ 8,400.00
17-Aug 2001 $ 8,400.00 $ 8,400.00
31-Aug 2001 $ 8,400.00 $ 8,400.00
14-Sep 2001 $ 8,400.00 $ 8,400.00
28-Sep 2001 $ 8,400.00 $ 8,400.00
12-Oct 2001 $ 8,400.00 $ 8,400.00
26-Oct 2001 $ 8,400.00 $ 8,400.00
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9-Nov 2001 $ 8,400.00 $ 8,400.00
23-Nov 2001 $ 8,400.00 $ 8,400.00
7-Dec 2001 $ 8,400.00 $ 8,400.00
Total $420,000.00 $ 1,209.60 $ 418,790.40
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