MUNSINGWEAR, INC.
0000 Xxxx 00xx Xxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
September 5, 1996
Xx. Xxxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxx XX 00000
Re: Resignation and Severance Agreement
Dear Xxxxxx:
This letter describes our agreement regarding your resignation as President and
Chief Executive Officer of Munsingwear, Inc. ("Munsingwear") effective as of the
first business day after the closing of the transaction between Munsingwear and
Supreme International Corporation, which is currently expected to occur on
September 6, 1996. You also agree to resign from Munsingwear's Board of
Directors as of the same date. If, after reading this letter, you feel there is
any discrepancy between our conversations and the content of this letter, please
contact me.
Munsingwear will provide you with the following benefits in connection with your
resignation:
1. We will pay you a regular monthly paycheck of $15,000, subject to
applicable withholding, for eighteen months, beginning with the first
day of the first month following expiration of the 15-day rescission
period described on page 3 of this agreement and our receipt of your
written certification, in a form identical to Exhibit 1 attached
hereto, that you have taken no steps to exercise your right of
rescission. Any unpaid amounts due to you under this paragraph shall
become immediately due and payable in a lump sum immediately following
any closing of the sale of Munsingwear's Premium business.
2. We will pay you $40,000, subject to applicable withholding, following
your signature on this agreement. You agree that you will immediately
repay this amount to Munsingwear if you exercise your right of
rescission.
3. We will pay the employer share of your currently provided group health
and life insurance premiums under Munsingwear's group health and life
plans through February 28, 1998 or until you are covered under other
group health and life plans, whichever occurs first, provided you make
the appropriate written COBRA and life insurance continuation elections
to continue your group coverages and provided the plans remain in
effect for Munsingwear's active employees. The premiums under said
plans shall be the same premiums payable with respect to active
Munsingwear employees and the coverages under said plans shall be the
same coverages which you were receiving prior to your resignation.
4. We are providing you with a letter of reference in connection with your
resignation. If any prospective employer of yours wishes to contact
Munsingwear for employment information, you agree to direct all such
prospective employers to make a written request only to me. I will
provide the prospective employer with your dates of employment, nature
of the positions you held with Munsingwear, and a letter of reference
to be agreed upon between you and me on behalf of Munsingwear.
5. The Board will take appropriate action to assure that all Stock Option
and Restricted Stock Agreements between you and Munsingwear shall be
immediately exercisable for the term currently provided.
6. You have the option within the next ten days to purchase the personal
computers owned or leased by Munsingwear and currently used by you in
your home for the price provided in paragraph 3 of Amendment No. 1 to
Employment Agreement (Exhibit 3), provided the leased computer may be
purchased at the cost Munsingwear is required to pay to buy out the
lease.
7. Munsingwear hereby releases you, your heirs, agents, attorneys and
successors from any and all claims and causes of action, known or
unknown, which Munsingwear may have against you and which have accrued
up to the execution of this agreement. Through this release,
Munsingwear extinguishes any contract, wage or benefit claims;
defamation or any other tort claims; and all claims arising from any
federal, state or municipal law or ordinance.
In consideration for the benefits outlined above, you agree to do the following
things:
1. You hereby covenant not to xxx and unconditionally release and forever
discharge Munsingwear, Inc., its affiliates, subsidiaries and related
entities, predecessors, successors, owners, its and their officers,
directors, agents, shareholders, employees, attorneys, insurers and
indemnitors and any entity affiliated with any of the foregoing
(collectively, the "Releasees") from any and all past or present
claims, demands, obligations, actions, damages, expenses of any nature
and causes of action, known and unknown, which you may have against any
and all of them. Through this release, you extinguish all causes of
action against the Releasees occurring up to the date of this
agreement, including but not limited to any contract, compensation,
expense or benefit claims; intentional infliction of emotional
distress, defamation or any other tort claims; any and all claims
arising out of or relating to your ownership of Munsingwear stock;and
all claims arising from any federal, state or municipal law or
ordinance. This release extinguishes any potential claims of employment
discrimination arising from your employment with and resignation from
Munsingwear, including specifically any claims under the Minnesota
Human Rights Act, the Americans With Disabilities Act, Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act and
the Older Workers Benefit Protection Act.
Under the Age Discrimination in Employment Act, you have 21 days to
review and consider this offer. If you sign this letter before 21 days
have elapsed from the date on which you first receive it (September 5,
1996), then you will be voluntarily waiving your right to the full
21-day review period. You understand that you are not releasing your
rights to any claims which arise after you sign this agreement and that
you are advised to review your rights and obligations under this
agreement with your own legal counsel. You have the right to rescind
this agreement within fifteen (15) calendar days of the date upon which
you sign it. You understand that if you desire to rescind this
agreement, you must put the rescission in writing and deliver it to Xx.
Xxxxxx X. Xxxxxxx, Munsingwear, Inc., 0000 Xxxx 00xx Xxxxxx, Xxxxx 000,
Xxxxxxxxxxx XX 00000, by hand or by mail. If your rescission is by
mail, it must be postmarked within 15 calendar days of the date on
which you sign this agreement and sent by certified mail, return
receipt requested. If you rescind this agreement, Munsingwear's
obligations to you will immediately cease, and Munsingwear will owe you
no amounts or benefits hereunder except as may be otherwise required
under the Employment Agreement attached as Exhibit 2 and Amendment No.
1 to Employment Agreement attached as Exhibit 3.
2. You agree not to (a) make, either directly or indirectly, any
derogatory or negative comments of any kind, either oral or written, to
any person or organization about Munsingwear or any officer, director,
shareholder, employee or any other person affiliated with Munsingwear;
or (b) in any way interfere with any of Munsingwear's business
relationships.
3. Until December 9, 1996, you agree to make yourself reasonably available
at mutually convenient times, as requested by Munsingwear, to provide
assistance and consulting services to Munsingwear in connection with
Munsingwear business matters, litigation or threatened litigation
involving Munsingwear. You also agree not to at any time in the future
directly or indirectly cooperate with any person or entity in any
threatened or actual litigation or claims against Munsingwear, except
as required by court order.
This agreement shall not in any way be construed as an admission of liability by
Munsingwear or as an admission that Munsingwear has acted wrongfully with
respect to you. Munsingwear specifically denies and disclaims any such liability
or wrongful acts.
This agreement sets forth our entire agreement and fully supersedes any prior
oral or written agreements or understandings between you and Munsingwear,
including the Employment Agreement attached as Exhibit 2 and the Amendment No. 1
to Employment Agreement attached as Exhibt 3, except for Sections IV(b) and
VII(a) of the Employment Agreement and paragraph 4 of Amendment No. 1 to
Employment Agreement, which shall remain fully enforceable in accordance with
their terms. Munsingwear asks that our records reflect that you conclude your
employment on terms you understand and accept and that you have entered into
this agreement voluntarily, without coercion or duress.
If this letter accurately reflects our understanding and agreement, please sign
the original and copy and return the original to me. The copy is for your file.
Sincerely,
MUNSINGWEAR, INC.
---------------------------------------
Xxxxxx X. Xxxxxxx
Chairman, Board of Directors
Read and agreed to, with declarations
confirmed, this ___day of ______, 1996.
