EXHIBIT 10.53
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into by and between Farah
Incorporated, a Texas corporation (the "Company"), and Xxxxxxx X. Xxxxxxxx (the
"Executive").
In consideration of the following and mutual covenants and agreements
hereinafter set forth, the Company and the Executive do hereby agree as follows:
1. Employment.
(a) The Company hereby employs the Executive and the Executive hereby
agrees to serve as an employee of the Company or one or more of its subsidiaries
on the terms and conditions set forth herein.
(b) The term of this Agreement shall commence on the date hereof and
shall continue for a three (3) year term (the "Initial Term"). The Agreement
shall be renewed automatically on a daily basis so that the term of this
Agreement shall continue for a full three year term. This term of this Agreement
may be terminated as provided in Section 4.
(c) The Executive shall serve as President and Chief Executive Officer
of the Company or such other offices as the Board of the Company or its
subsidiaries (the "Boards") shall assign and shall perform such duties and
responsibilities as may from time to time be prescribed by the Boards, provided
that such duties and responsibilities are consistent with the Executive's
position. The Executive shall perform and discharge faithfully, diligently and
to the best of his ability such duties and responsibilities and shall devote all
of his working time and efforts to the business and affairs of the Company and
its subsidiaries.
(d) In connection with his employment, the Executive shall be based at
the Company's El Paso office, or such other location as may be agreeable to both
the Company and the Executive.
2. Compensation.
(a) The Company and/or its subsidiaries shall pay to the Executive a
minimum annual salary of $325,000, or such additional amounts as the Boards may
approve (the "Base Salary"), payable in monthly installments on the last day of
each month throughout the term of such employment, subject to Section 4 hereof.
The Board, upon review of the Executive's performance and/or the profitability
of the Company and its subsidiaries, may pay the Executive a bonus, as the
Boards in their sole discretion may determine to be appropriate.
(b) The Company and/or its subsidiaries shall pay to the Executive such
amounts as may be established under any cash or equity incentive plans approved
by the Boards, based upon profit performance or stock values.
(c) During the term of his employment hereunder, the Executive shall be
entitled to participate in or receive benefits under the Company's employee
benefit plans and arrangements which are available to senior executive officers
of the Company or its subsidiaries. Nothing paid to the Executive under any such
plans or arrangements shall be deemed to be in lieu of compensation to the
Executive hereunder.
(d) The Company's agrees to pay the cost of premiums for a split-dollar
life insurance policy for the Executive on such terms and conditions, and
containing such benefits for the Executive and the Company, as the Company's
Stock Option and Compensation Committee may deem appropriate. The cost of
premiums for such split-dollar life insurance policy shall be not greater than
$121,000 per annum, unless otherwise agreed by the Company. Except as otherwise
provided in Section 5 of this Agreement, the Company shall be obligated during
the term of this Agreement to pay a minimum of three annual premium payments of
$121,000, or an aggregate amount of premiums of $363,000, including any payments
made during the Initial Term or any term after the Initial Term (the "Minimum
Premium Commitment").
3. Unauthorized Disclosure and Activity.
(a) While employed by the Company and for a period of three (3) years
after termination of employment, the Executive shall not, without a written
consent of the Board or a person duly authorized thereby, disclose to any
person, other than a person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by the Executive of his duties as
an executive officer of the Company or its subsidiaries, any material
confidential information obtained by him while in the employ of the Company or
its subsidiaries with respect to any of the products, improvements, license
agreements, formulas, designs, methods of manufacture, vendors or customers, the
disclosure of which he knows or in the exercise of reasonable care should know,
would be damaging to the Company or its subsidiaries; provided, however, that
confidential information shall not include any information known generally to
the public (other than as a result of unauthorized disclosure by the Executive)
or any information not otherwise considered by the Boards to be confidential.
The Executive shall not disclose any confidential information of the type
described above, except as may be required by law in connection with any
judicial or administrative proceeding or inquiry.
(b) In addition, the Executive shall not either during the term of this
Agreement or within three (3) years following termination of employment from any
reason whatsoever, solicit any employee of the Company or its subsidiaries to
terminate his relationship with the Company or its subsidiaries or to influence
an employee to seek employment with any competitor of the Company or its
subsidiaries.
(c) (i) Executive agrees that he will not (without the prior written
consent of the Company) at any time during the period beginning with termination
of Executive's employment and ending one (1) year from the date thereof (the
"Non-Compete Period), directly or indirectly, either individually or in
partnership or jointly in conjunction with any person or persons, firm,
association, syndicate, company or corporation, as principal, agent,
shareholder, consultant, officer, director, employee or in any other capacity
whatsoever, carry on or be engaged in or be concerned with or financially
interested in, or advise, lend money to, guarantee the debts or obligations of
or permit his name or any part thereof to be used or employed by, any person or
persons, firm, association, syndicate, company or corporation engaged or
interested in or concerned with, any material aspect, directly or indirectly, of
the business in which the Company, or any of its subsidiaries or affiliates, is
engaged on the date of termination in the United States or in any country in
which the Company, or any of its subsidiaries or affiliates conducts such
business (the "Business").
(ii) Notwithstanding subsection (i) above, Executive may own or hold up to
5% of the outstanding shares of capital stock of any company engaged in the
Business that is a publicly-traded company so long as Executive does not have
any other relationship, directly or indirectly, with such company.
(d) (i) Executive acknowledges that a breach by him of Section 3 would
cause irreparable damage to the Company, and in the event of Executive's actual
or threatened breach of Section 3, the Company shall be entitled to a temporary
restraining order and an injunction restraining Executive from breaching such
provisions without the necessity of posting bond or proving irreparable harm,
such being conclusively admitted by Executive. Nothing shall be construed as
prohibiting the Company from pursuing any other available remedies for such
breach or threatened breach, including, without limitation, the recovery of
damages from Executive. Executive acknowledges that the restrictions set forth
in Section 3 are reasonable in scope and duration given the nature of the
business of the Company. Executive agrees that the issuance of an injunction
will not pose an unreasonable restriction on Executive's ability to obtain
employment or other work following termination of this Agreement.
(ii) Executive has carefully read and considered the
provisions of Section 3, and, having done so, agrees that the
restrictions set forth in such sections including, without
limitation, the time period of restriction and geographical
area of restriction are fair and reasonable and are reasonably
required for the protection of the interests of the Company.
Notwithstanding the foregoing, in the event that any of the
provisions of Section 3 hereof shall be held to be invalid or
unenforceable, the remaining provisions hereof shall
nevertheless continue to be valid and enforceable as though
the invalid or unenforceable part(s) had not been included
therein. In the event that any provisions of subsection (b)
and (c) relating to the time period and/or the area of
restriction shall be declared by a court of competent
jurisdiction to exceed the maximum time period or area such
court deems reasonable and enforceable, this Agreement shall
be reformed by such court and the time period and/or area of
restriction deemed reasonable and enforceable by the court
shall become and thereafter be the maximum time period and/or
area of restriction.
4. Termination.
(a) Death. The Executive's employment hereunder shall terminated
upon his death.
(b) Incapacity. The Company may terminate the Executive's employment
hereunder by giving written Notice of Termination, as defined below, to the
Executive in the event of the Executive's incapacity due to physical or mental
illness which prevents the proper performance of his duties set forth herein or
established pursuant hereto for a substantial portion of any six (6) month
period of the Executive's term of employment hereunder.
(c) Cause. The Company may terminate the Executive's employment
hereunder for Cause by giving written Notice of Termination to the Executive.
For the purpose of this Agreement, the Company shall have "Cause" to terminate
the Executive's employment hereunder upon the Executive's (i) willful gross
failure to materially perform and discharge his duties and responsibilities
hereunder or any breach by the Executive of the provisions of Section 3 herein,
(ii) misconduct that is materially injurious to the Company or its subsidiaries,
or (iii) conviction of a felony involving the personal dishonesty of the
Executive or moral turpitude.
(d) Change in Control. In the event of a change in control of the
Company, the Executive may terminate his employment (i) at any time during the
term of this Agreement, for Good Reason, by giving written notice to the Company
which shall set forth in reasonable detail the facts and circumstances
constituting Good Reason, or (ii) on or after the date of the change in control
of the Company for a period of one hundred and eighty (180) day from and after
the date of the change in control of the Company, in his sole discretion, by
providing written notice thereof to the Company. The date of termination
specified in the notice shall be no earlier than the date 60 days after the date
such notice is delivered or mailed to the Company. For purposes of this
Agreement:
(i) "Change in control" of the Company shall mean a change in control
of a nature that would be required to be reported (assuming each such
event has not been "previously reported") in response to Item 1(a) of
the current Report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act"), provided that, without limitation, such a change
in control shall be deemed to have occurred at such time as (A) any
"person", as such term is used in Section 14(d) of the Exchange Act,
other than the Company, a wholly-owned subsidiary of the Company or any
employee benefit plan of the Company, or its subsidiaries, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of 20% (the "Relevant
Percentage") or more of the combined voting power of the Company's
common stock; provided, however, the Relevant Percentage shall be 40%
solely in respect of any acquisitions of common stock by Georges or
Xxxx Xxxxxxxx, of any of their respective affiliates, or (B)
individuals who constitute the Board of Directors of the Company on the
date hereof (the "Incumbent Board") cease for any reason to constitute
at least a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election or nomination for
election by the Company's shareholders was approved by a vote of at
least three quarters of the directors comprising the Incumbent Board
(either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director without
objection to such nomination) shall be, for purposes of this clause
(i), considered as though such person were a member of the Incumbent
Board. Notwithstanding anything in the foregoing to the contrary, no
change in control shall be deemed to have occurred for purposes of this
Agreement by virtue of any transaction which results in the Executive,
or a group of persons which includes the Executive, acquiring, directly
or indirectly, 20% or more of the combined voting power of the
Company's common stock.
(ii) "Good Reason" shall mean (A) a substantial adverse change in
the Executive's status or position(s) as an executive officer of the
Company or its subsidiaries as in effect immediately prior to the
change in control, including, without limitation, any adverse change in
the Executive's status or position(s) as a result of a material
diminution in duties or responsibilities or the assignment to the
Executive of any duties or responsibilities which, in the Executive's
reasonable judgment, are inconsistent with such status or position(s)
or any removal of the Executive from or any failure to reappoint or
reelect the Executive to such position(s) (except in connection with
the termination of the Executive's employment for Cause or
incapability, as a result of Executive's death, or by Executive other
than for Good Reason); (B) a reduction by the Company or its
subsidiaries in the Executive's Base Salary as in effect immediately
prior to the change in control; or (c) the Executive' s office is
moved, without his mutual consent, from the city where the Executive's
office is located immediately prior to the change in control, except
for required travel on the Company's and it subsidiaries' business to
an extent substantially consistent with the business travel obligations
which the Executive undertook on behalf of the Company or its
subsidiaries prior to the change in control.
(e) Notice of Termination. Any termination by the Company pursuant to
the Sections 4(b) or (c) above shall be communicated by written Notice of
Termination to the Executive. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision of this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for such termination. The
date of termination specified in the Notice of Termination shall not be earlier
than the date such Notice is delivered or mailed to the Executive.
5. Payments to Executive upon Termination.
(a) Death. If the Executive's employment shall be terminated by reason
of death, his estate shall be paid all salary, bonus or other Benefits, as
defined below, otherwise payable to the Executive through the end of the month
in which his death occurred and the Company and its subsidiaries shall have no
further obligations to the Executive under this Agreement.
(b) Incapacity. If the Executive's employment is terminated by reason of
incapacity, the Executive or person charged with legal responsibility for the
Executive's estate shall be entitled to be paid the following:
(i) all salary , bonus or other Benefits accrued
or accruable to the Executive through the date of
termination specified in the Notice of Termination;
(ii) salary for thirty-six (36) months after the date of
such termination based on the Base Salary immediately
prior to the date of termination; and
(iii) the annual premiums for the split-dollar life
insurance policy described under Section 2(d) until
the earlier to occur of the date (A) of death of the
Executive,
except to the extent of unpaid premiums as of the date of death, (B) no further
premium payments are required under the terms of such policy, or (C) the Minimum
Premium Commitment has been paid.
After such payments, the Company or its subsidiaries shall have no further
obligations to the Executive under this Agreement.
(c) Cause. If the Executive's employment shall be terminated for Cause,
the Company or its subsidiaries shall pay the Executive his Base Salary and
Benefits through the date of termination specified in the Notice of Termination,
and the Company and its subsidiaries shall have no further obligations to the
Executive under this Agreement, including, but not limited to, any obligations
in respect of the Minimum Premium Commitment.
(d) Change in Control and Other Than Cause. If the Executive's
employment is terminated (i) by the Company other than as a result of death,
disability or Cause as specified in Sections 4(a), (b) or (c) above, or (ii) by
the Executive as specified in Section 4(d), the Executive shall be entitled to
the following:
(i) payment of salary for thirty-six (36)
months after the date of such termination based on
the Base Salary immediately prior to the date of
termination, except in the event of termination by
Executive pursuant to Section 4 (d)(ii) in which case
the obligation shall be payment of salary for
eighteen (18) months after the date of such
termination based on the Base Salary immediately
prior to the date of termination;
(ii) the Company shall maintain in full
force and effect for the Executive's benefit, for
thirty-six (36) months (eighteen (18) months in the
event of termination by Executive pursuant to Section
4(d)(ii)) after such termination, the Benefits, as
defined below; and
(iii) payment of the annual premiums for the
split-dollar life insurance policy described under
Section 2(d) until the earlier to occur of the date
(A) of death of the Executive, except to the extent
of unpaid premiums as of the date of death, (B) no
further premium payments are required under the terms
of such policy, or (C) the Minimum Premium Commitment
has been paid.
The term "Benefits shall mean all health insurance, long-term disability, life
insurance (excluding the split-dollar policy described in Section 2(d) and which
benefits in respect thereof are described below) and accidental death and
disability benefits in which the Executive was entitled to participate
immediately prior to such termination; provided that such continued
participation is possible under the general terms and provisions of such
programs, plans and arrangements providing for the Benefits; provided further
that if the Executive's participation in any such plan, program or arrangement
is barred, or any such plan, program or arrangement is discontinued or the
Benefits thereunder materially reduced, the Company and its subsidiaries shall
arrange to provide the Executive with Benefits substantially similar to those
which the Executive was entitled to receive under such plans, programs and
arrangements immediately prior to the date of the change in control. The Company
shall also make available to the Executive federal group health plan
continuation coverage for the period following the period in which Benefits are
provided during the severance period.
6. Stock Options Upon Termination. To the extent the Executive is an
Optionee (as defined under the Company's 1991 Stock Option and Restricted Stock
Plan (the "Plan")), if the Executive's employment is terminated without Cause,
the Executive may elect to extend the period in which he may exercise his
options under the Plan to one (1) year after his termination; provided, however,
that if such options are exercised after a period of ninety (90) days after his
employment is terminated, such options will become Nonstatutory Options (as
defined in the Plan).
7. Limitation on Payments.
If any payments made pursuant to the terms of this Agreement
(or any other agreement or arrangement between the Company and the Executive),
when aggregated with any other payments made to the Executive, would result in
the imposition of an excise tax under Section 4999 of the Internal Revenue Code
of 1986, as amended, the Company shall pay to the Executive, in addition to
amounts otherwise payable under this Agreement, an amount sufficient, after
federal and state income taxes, to pay the excise tax so payable and all
directly related interest and penalties such that the net amount to the
Executive would be the same as if no excise tax had been imposed.
8. Notices. For the purpose of this Agreement, notices and all other
communications to either party hereunder provided for in the Agreement shall be
in writing and shall be deemed to have been duly given when delivered in person
or mailed by first-class mail or airmail, postage prepaid, addressed:
in the case of the Company, to:
Farah Incorporated
0000 Xxxxxxx Xxxx
Xx Xxxx, Xxxxx 00000
X.X. Xxx 0000
Xx Xxxx, Xxxxx 00000
Attention: Corporate Secretary
in the case of the Executive, to:
Xxxxxxx X. Xxxxxxxx
000 Xxxxxxxxx
Xx Xxxx, Xxxxx 00000
or to such other address as either party shall designate by giving written
notice of such change to the other party.
9. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is approved
by the Board of Directors of the Company and agreed to in writing signed by the
Executive and such officer as may be specifically authorized by the Board of
Directors of the Company. No waiver by either party hereto of any breach of this
Agreement shall be deemed a waiver of similar or dissimilar provisions or
conditions of this Agreement. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
10. Validity. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any present or future law, such provision shall
be fully severable, this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
the remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom, and in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar to the terms and intent of
such illegal, invalid or unenforceable provision as may be possible.
11. Survival. The provisions of this Agreement shall not survive the
termination of the Executive's employment hereunder, except that the provisions
of Sections 3, 4, 5 and 6 hereof shall survive such termination and shall be
binding upon the Executive's personal or legal representative, executors,
administrators, successors, heirs, distributees, devisees and legatees and
except that the provisions of Sections 2, 4, 5, 6 and 7 hereof shall survive
such termination and shall be binding upon the Company and its subsidiaries.
12. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
13. Entire Agreement. This Agreement, together with any awards of stock
options or stock awards under the Company's stock option and restricted stock
plans, constitutes the full agreement and understanding of the parties hereto
regarding the employment of the Executive with the Company and its subsidiaries
and all prior agreements or understandings are merged herein.
14. Arbitration and Attorneys' Fees. Any dispute arising in connection
with this Agreement shall be finally resolved by arbitration in El Paso, Texas,
conducted pursuant to and in accordance with the commercial rules of arbitration
of the American Arbitration Association. Any party may request arbitration by
sending written notice to the other party. In any such arbitration, the only
issues to be considered and determined by the arbitrators shall be issues
pertaining to rights and obligations of the parties under this Agreement, and
remedies appropriate thereto. The decision and award of the arbitrator(s) shall
be final and binding upon the parties, shall constitute the sole and exclusive
remedy for any dispute between the parties, may be entered in any court having
jurisdiction thereof, and application may be made to such court for judicial
acceptance and/or an order enforcing such decision and/or award. In the event
the arbitrator(s) determine there is a prevailing party in the arbitration, the
prevailing party shall recover from the losing party all costs of arbitration,
including, but not limited to arbitrator's fees and reasonable attorneys' fees
incurred by the prevailing party. Notwithstanding this Section 14, and as
provided in Section 3(d) above, nothing in this arbitration provision shall
prevent the Company from applying to a court of law or equity for a temporary
restraining order, an injunction, or similar relief, in order to enforce its
rights under Section 3 of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of this 10th day of July, 1995.
FARAH INCORPORATED
By: /s/ Xxxxxxx X. Page
Title: Executive Vice President
Chief Operating Officer
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, Executive
