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SEVERANCE AGREEMENT AND RELEASE
BETWEEN
DUCK HEAD APPAREL COMPANY, INC.
and
XXXXXXX X. XXXXXXXX
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A. INTRODUCTION
Xxxxxxx X. Xxxxxxxx is a salaried employee working in Duck Head Apparel
Company, Inc. Because of business conditions, Duck Head Apparel Company, Inc. is
conducting a reduction in force among all salaried employees assigned to Duck
Head Apparel Company, Inc. and among all salaried home office personnel assigned
to Delta Merchandising, Inc. As part of this reduction in force, Xxxxxxx X.
Xxxxxxxx'x employment ended on March 29, 2001, which is the employee's "Release
Date." In this Agreement, "Employee" means Xxxxxxx X. Xxxxxxxx, and "Duck Head
Apparel" means Duck Head Apparel Company, Inc. The purpose of this Severance
Agreement and Release (the "Agreement") is to state the conditions of Employee's
termination and to resolve any dispute that might exist between Employee and
Duck Head Apparel.
X. XXXXXXXXX PAY FOR THE 2001 SALARIED REDUCTION IN FORCE
Duck Head Apparel maintains a "Severance Plan for Salaried Employees of
Duck Head Apparel Company, Inc.," (the "Severance Plan") for salaried employees
whose employment terminates under certain conditions. Under this Severance Plan,
an eligible, salaried employee receives certain benefits in return for the
employee signing a release as required by the Severance Plan. If the release is
signed, an eligible employee receives a severance benefit of two (2) weeks of
base pre-termination salary, plus one (1) week for each full year of Service
Credit.
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Initials of the Parties
Employee ____ Duck Head Apparel ___
(The severance benefit is capped at a maximum of twenty-six (26) weeks'
pay and is calculated based upon the employee's base salary at the time of
termination. Any service credit for a partial year of service in excess of six
months shall be rounded to the next highest year.)
Duck Head Apparel has decided to exercise its discretion under the
Severance Plan to offer Employee an extended severance benefit in excess of that
to which the Employee is otherwise entitled under the Severance Plan provided,
however, the Employee agrees to modify the parties' Severance Protection
Agreement, dated November 3, 2000 ("Severance Protection Agreement") to allow a
setoff of the severance pay pursuant to this Agreement against the employee's
severance entitlement pursuant to the Severance Protection Agreement. In
consideration of this modification, Duck Head Apparel agrees to extend the
Employee's severance from 4 weeks' entitlement, or $8,480.00, to 26 weeks, or
$55,120.00. In further consideration of this modification, Duck Head Apparel
also agrees to provide the Employee with an additional 26 weeks, or $55,120.00,
severance benefit if there is a "Change in Control" as defined in the Severance
Protection Agreement between the 61st and 180th day following the Employee's
Release Date. This Severance Agreement and Release is the release Employee must
sign to receive this severance benefit.
C. DUCK HEAD APPAREL'S PROMISES TO EMPLOYEE
In return for the promises of Employee contained in this Agreement,
Duck Head Apparel promises to do the following:
(1) Duck Head Apparel will pay Employee a severance benefit in the
amount of $55,120.00, which represents 26 weeks of Employee's
salary, payable by continuation of Employee's salary until
Employee's severance benefit is exhausted. Payments will be
made to Employee on or after Employee's customary pay days.
Employee will start receiving checks for these payments after
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Initials of the Parties
Employee ___ Duck Head Apparel ___
the effective date of this Agreement (please see Paragraph
F.(14) to determine the effective date) or Employee's Release
Date, whichever is later. From each payment, Duck Head Apparel
will make the required deductions for state and federal income
taxes, FICA, etc.
(2) Duck Head Apparel will pay employee an additional severance
benefit in the amount of $55,120.00, which represents an
additional 26 weeks of Employee's salary, payable by
continuation of Employee's salary until Employee's severance
benefit is exhausted if, between the 61st and 180th day
following Employee's termination, there is a "Change in
Control" as defined in the Severance Protection Agreement.
These payments will be made to Employee on or after Employee's
customary pay days.
D. EMPLOYEE'S PROMISES TO DUCK HEAD APPAREL
In exchange for the promises of Duck Head Apparel contained in this
Agreement, Employee promises to do the following:
(1) Employee releases and discharges Duck Head Apparel, any
predecessor corporations, any successor corporations, any
parent corporations, any subsidiaries, any related
corporations, entities or persons, and all their employees,
directors, and agents from all legal, equitable, and
administrative claims that Employee may have against any of
them. Employee agrees that this includes the waiver of any
claims arising from Employee's employment with, or termination
from, Duck Head Apparel or Delta Merchandising, Inc. This
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Employee ___ Duck Head Apparel ___
release specifically includes, but is not limited to, claims
based upon or related to:
(a) The Age Discrimination in Employment Act;
(b) The Employee Retirement Income Security Act;
(c) The Workers Adjustment Retraining Notification Act;
(d) All other claims, including but not limited to,
claims for attorneys' fees, arising under any
federal, state, or local statutes, common law,
ordinances, or equity.
Employee, however, keeps Employee's right to (1)
receive severance benefits under the terms of this Agreement
and the Severance Plan, (2) receive retirement benefits under
the terms of any retirement plan in which Employee has earned
a vested benefit, (3) receive Accrued Compensation pursuant to
the terms of the Severance Protection Agreement, subject to a
setoff of the severance benefits described herein in Paragraph
C(1), and (4) elect health care coverage under the federal
continuation of health coverage law known as COBRA, or under
any applicable state law concerning continuation of health
coverage, unless Employee is ineligible for such coverage
under the applicable law.
(2) Employee waives any right Employee may have to recover in any
proceeding that is based in whole or in part on claims
released by Employee in this Agreement. For example, Employee
waives any right to monetary recovery or reinstatement if such
a charge or action is successfully brought against Duck Head
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Employee ___ Duck Head Apparel ___
Apparel or is settled, whether by Employee, the EEOC, or by
any other person or entity, including any state or federal
agency.
(3) Employee agrees to modify the Severance Protection Agreement
to allow a setoff of the severance benefit pursuant to this
Agreement against the Employee's severance entitlement
pursuant to the Severance Protection Agreement.
(4) Employee agrees that this release includes any claim that
Employee may have, including claims of which Employee may not
presently be aware. This Agreement does not release any claims
that may arise after Employee signs this Agreement.
E. MISCELLANEOUS TERMS AGREED TO BY THE PARTIES
In exchange for the promises made by and to Employee and Duck Head
Apparel, they mutually agree to the following terms:
(1) Either party may enforce this Agreement in court if the other
party breaches it.
(2) This Agreement may be used in a subsequent proceeding to
enforce its terms.
(3) The language of all parts of this Agreement shall be
construed as a whole and according to its fair meaning, and
not strictly for or against either party. It is expressly
understood and agreed that any rule requiring construction of
this Agreement against the drafter will not apply in any
dispute involving the Agreement.
(4) Duck Head Apparel does not admit violating any state, federal,
or local laws by entering into this Agreement.
(5) This Agreement contains the entire and only Agreement between
Duck Head Apparel and Employee. Both parties waive any oral or
written promises or assurances that are not contained in, or
expressly incorporated into, this Agreement.
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Employee ___ Duck Head Apparel ___
F. EMPLOYEE'S ASSURANCES TO DUCK HEAD APPAREL
This Agreement is a legal document with legal consequences. Duck Head
Apparel wants to be certain Employee fully understands the legal effect of
signing this Agreement. Employee, therefore, makes the following assurances:
(1) I HAVE CAREFULLY READ THE COMPLETE AGREEMENT.
(2) THE AGREEMENT IS WRITTEN IN LANGUAGE THAT I UNDERSTAND.
(3) I UNDERSTAND ALL OF THE PROVISIONS OF THIS AGREEMENT.
(4) I UNDERSTAND THAT THIS AGREEMENT IS A WAIVER OF ANY AND ALL
CLAIMS I MAY HAVE AGAINST DUCK HEAD APPAREL AND ALL THE OTHER
PARTIES LISTED IN PARAGRAPH D.(2).
(5) I ALSO UNDERSTAND THAT THIS AGREEMENT IS A WAIVER OF ANY AND
ALL CLAIMS OF AGE DISCRIMINATION I HAVE UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT.
(6) I WILLINGLY WAIVE ANY AND ALL CLAIMS, KNOWN OR UNKNOWN, IN
EXCHANGE FOR THE PROMISES OF DUCK HEAD APPAREL IN THIS
AGREEMENT. I UNDERSTAND, HOWEVER, THAT I AM NOT RELEASING ANY
CLAIMS THAT ARISE AFTER I SIGN THIS AGREEMENT.
(7) I WANT TO ENTER THIS AGREEMENT. I RECOGNIZE THAT THE AGREEMENT
IS FINANCIALLY BENEFICIAL TO ME. I FURTHER ACKNOWLEDGE THAT
THE BENEFITS I RECEIVE UNDER THIS AGREEMENT ARE BENEFITS TO
WHICH I AM NOT ALREADY ENTITLED.
(8) I ENTER THIS AGREEMENT FREELY AND VOLUNTARILY. I AM UNDER NO
COERCION OR DURESS WHATSOEVER IN CONSIDERING OR AGREEING TO
THE PROVISIONS OF THIS AGREEMENT.
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Employee ___ Duck Head apparel ___
(9) I HAVE NOT RELIED ON ANY REPRESENTATIONS, PROMISES, OR
STATEMENTS THAT ARE NOT CONTAINED IN THIS AGREEMENT.
(10) I UNDERSTAND THAT THIS AGREEMENT IS A CONTRACT. AS SUCH, I
UNDERSTAND THAT EITHER PARTY MAY ENFORCE IT.
(11) I HAVE BEEN GIVEN A COPY OF THE SUMMARY PLAN DESCRIPTION (SPD)
FOR THE SEVERANCE PLAN. I HAVE NOT RELIED ON ANY
REPRESENTATIONS, PROMISES, OR STATEMENTS THAT ARE NOT
CONTAINED IN EITHER THIS AGREEMENT OR THE SPD.
(12) I HAVE READ ATTACHMENT A TO THIS AGREEMENT. ATTACHMENT A HAS
INFORMATION REGARDING DUCK HEAD APPAREL'S 2001 SALARIED
REDUCTION IN FORCE. IT DESCRIBES THE GROUP OF INDIVIDUALS FROM
WHICH EMPLOYEES WERE SELECTED FOR THE REDUCTION IN FORCE AND
THE OFFER OF THE SEVERANCE PACKAGE. IT ALSO DESCRIBES THE
ELIGIBILITY FACTORS FOR THE OFFER OF SEVERANCE PACKAGE.
ATTACHMENT A ALSO INCLUDES INFORMATION REGARDING THE JOB
TITLES AND AGES OF ALL INDIVIDUALS WHO WERE IN THE GROUP FROM
WHICH EMPLOYEES WERE SELECTED OR NOT SELECTED FOR THE
REDUCTION IN FORCE AND THE OFFER OF THE SEVERANCE PACKAGE.
(13) I HAVE BEEN GIVEN A PERIOD OF FORTY-FIVE (45) DAYS TO DECIDE
WHETHER TO ENTER INTO THIS AGREEMENT. THIS FORTY-FIVE (45) DAY
PERIOD HAS PROVIDED ME WITH SUFFICIENT TIME TO CONSIDER MY
OPTIONS AND TO SEEK THE ADVICE OF LEGAL COUNSEL, TAX OR
FINANCIAL ADVISORS, FAMILY MEMBERS, AND ANYONE ELSE WHOSE
ADVICE I VALUE.
(14) AFTER SIGNING THIS AGREEMENT, I HAVE A PERIOD OF SEVEN (7)
DAYS TO REVOKE IT. I CAN REVOKE THIS AGREEMENT BY NOTIFYING
XXXXXXX XXXXX, DIRECTOR OF HUMAN RESOURCES, IN WRITING OF MY
DECISION TO REVOKE THE AGREEMENT WITHIN THE SEVEN (7) DAY
PERIOD. IN FACT, THIS AGREEMENT IS NOT EFFECTIVE UNTIL THE
EIGHTH (8TH) DAY AFTER IT IS SIGNED.
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Employee ___ Duck Head Apparel ___
(15) DUCK HEAD APPAREL HAS URGED ME, IN WRITING, TO REVIEW THIS
DOCUMENT WITH AN ATTORNEY PRIOR TO SIGNING.
IN WITNESS THEREOF, we have hereunto set our hand and seal:
EMPLOYEE DUCK HEAD APPAREL COMPANY, INC.
/s/ Xxxxxxx X. Xxxxxxxx 4/3/01 By: /s/ Xxxxxxx Xxxxx 4/3/01
-------------------------------- ------------------------------------
(Date) (Date)
Its: Director of Human Resources
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Employee ___ Duck Head Apparel ___
March 29, 2001
Xxxxxxx Xxxxxxxx
0000 Xxx Xxxxxx
Xxxxxx, XX 00000
Re: 2001 Duck Head Apparel Salaried Reduction in Force
Dear Xxxxx:
As you have been informed, Duck Head Apparel Company, Inc. (Duck Head
Apparel) is conducting a reduction in force among all salaried employees
assigned to Duck Head Apparel, Inc. and among salaried home office personnel
assigned to Delta Merchandising, Inc. The company made this decision because of
the current financial condition of the company. Your employment with Duck Head
Apparel ended as a result of this reduction in force.
While we are sorry that this has occurred, we are pleased to tell you
that Duck Head Apparel will offer a severance package during this reduction in
force. As a result of your termination, you are potentially eligible under the
Severance Plan for Salaried Employees of Duck Head Apparel Company, Inc. (the
Plan) for a severance benefit equal to two weeks of your base pre-termination
salary, plus one week of your base pre-termination salary for each year of
service with the company. (The severance benefit is capped at twenty-six (26)
week's salary. Your base pre-termination salary is your base salary immediately
before termination, exclusive of bonuses, overtime pay, commissions, and other
similar payments.) You are also potentially eligible for an extended severance
benefit as set forth in the Severance Agreement described below. Duck Head
Apparel will make the required deductions for state and federal taxes, FICA,
etc. from your benefit amount.
In accordance with the terms of the Plan, you must sign a Severance
Agreement and Release with the company in order to receive the severance
benefit. With this Agreement, you will release all claims against Duck Head
Apparel, any associated companies, all their employees, directors, and so forth.
This includes claims under the Age Discrimination in Employment Act.
We have attached a copy of the Agreement with this letter for your
review. The Agreement is an important legal document, and we want to make sure
that you understand it:
o We advise you to consult with an attorney prior to signing the Agreement.
o Please make sure that you fully understand the Agreement and
what it does. To put it simply, by signing the Agreement, you
give up all rights you would have to xxx the company for any
claim you have against the company at the time of signing.
o The Agreement also waives any claims that you have for age
discrimination under the Age Discrimination in Employment Act.
o We attempted to write the Agreement in plain language. If you
do not understand it, please let us know at once. To answer
any questions about the Agreement or what it means, you should
talk with your attorney or anyone else whose advice you
respect.
o Federal law requires that we provide you with certain
information about this severance offer. This information is
enclosed as Attachment A to the Agreement.
o You have forty-five (45) days to consider the Agreement and
decide whether you want to sign it or not. If you do sign the
Agreement, please provide it to me. You then will have seven
(7) days following the date that you signed the Agreement to
revoke it. In fact, the Agreement does not become effective or
enforceable until the seven (7) day revocation period has
expired.
o If you do choose to revoke the Agreement, you must inform me
in writing prior to the expiration of the revocation period.
Once again, if you have any questions regarding this letter or the
enclosed Agreement, please get in touch with your attorney or me immediately. We
wish you the best in the future.
Sincerely,
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
Director of Human Resources
April 2, 2001
Xx. Xxxxxxx X. Xxxxxxxx
0000 Xxx Xxxxxx
Xxxxxx, XX 00000
Dear Xxxxx:
This letter is to inform you that in recognition of your service to
Duck Head Apparel Company, Inc. (the "Company"), the Compensation Grants
Committee (the "Committee") of the Board of Directors has provided for the
modification of the terms of the Incentive Stock Award Agreement dated August 1,
2000 (the "Incentive Agreement") and the Stock Option Agreements dated July 31,
2000 and September 8, 2000 (the "Option Agreements") entered into by and between
you and the Company. The modifications described herein are contingent upon the
execution of that certain proposed Severance Agreement and Release by and
between the Company and Xxxxxxx X. Xxxxxxxx regarding your release from
employment with the Company effective March 29, 2001 (the "Release Agreement").
The modifications to the Incentive Agreement and Option Agreements described
herein will become effective only if and when the Release Agreement has been
fully executed by all parties thereto and has become irrevocable.
On August 1, 2000, you vested with respect to 2,000 of the 10,000
shares subject to the Incentive Agreement. Under the original terms of the
Incentive Agreement, the remaining 8,000 unvested shares would be forfeit due to
your termination of employment. Contingent upon execution of the Release
Agreement, the Committee has modified the terms of the Incentive Agreement to
provide that you will vest with respect to an additional 3,000 shares under the
Incentive Agreement effective as of the date that the fully executed Release
Agreement becomes irrevocable. The remaining 5,000 shares will still be forfeit
as a result of your termination of employment.
Section G. of the original Option Agreements provides that the stock
options described therein would expire within a specified period after your
termination of employment with the Company. Contingent upon execution of the
Release Agreement, the Committee has modified the terms of the Option Agreements
to delete Section G. from each Agreement in its entirety.
Except as expressly described herein, the terms and conditions of the
Incentive Agreement and the Option Agreements will remain unchanged, and your
incentive stock and stock option awards will remain subject to the terms of the
Company's Incentive Stock Award Plan and 2000 Stock Option Plan.
Sincerely,
/s/ K. Xxxxx Xxxxxxxxx
K. Xxxxx Xxxxxxxxx
Senior VP and CFO
Duck Head Apparel Company, Inc.
