EMPLOYMENT AGREEMENT BETWEEN HAMPSHIRE GROUP, LIMITED AND MAURA MCNERNEY
EXHIBIT 99.0
THIS AGREEMENT is made and entered into as of the 3rd day of April, 2007 by and
between Hampshire Group, Limited, a Delaware corporation, with offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (“Hampshire” or the “Company”), and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual
residing at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (“▇▇▇▇▇▇▇▇”).
WHEREAS, Hampshire desires to employ ▇▇▇▇▇▇▇▇ and to assure itself of
her continued services on the terms set forth herein; and
WHEREAS, ▇▇▇▇▇▇▇▇ desires to be so employed under the terms set forth herein.
NOW THEREFORE, in consideration of the premises, mutual covenants, conditions and promises in
this Agreement, the parties hereto agree as follows:
1. Employment.
Subject to the terms and conditions contained herein, ▇▇▇▇▇▇▇▇ will serve as
Vice President of Compliance of the Company. In such capacity, ▇▇▇▇▇▇▇▇ shall have duties and
responsibilities typically associated with such title, and will report directly to the Chief
Financial Officer of the Company, or such other officer or employee as may be designated by a
superior officer from time to time. During the term of this Agreement, ▇▇▇▇▇▇▇▇ shall devote
substantially all of her business time, skill and attention to the performance of her duties on
behalf of the Company.
2. Term. The terms of this Agreement shall apply for the calendar year 2007 and for each year
thereafter unless sooner terminated as herein provided.
3. Salary. As compensation for her services, ▇▇▇▇▇▇▇▇ will be paid a base salary of One
Hundred Thirty Thousand Dollars ($130,000.00) per annum, payable in accordance with the Company’s
customary payroll practices less appropriate withholdings and deductions required by law.
4. Annual Bonus. For calendar year 2007 and beyond, ▇▇▇▇▇▇▇▇ will be eligible to receive an
Annual Bonus based upon a bonus program established from time to time by the Compensation Committee
of the Board of Directors. All payments made pursuant to this Paragraph 4 shall be made in
accordance with the Company’s customary payroll practices less appropriate withholdings and
deductions required by law.
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5. Benefits.
▇▇▇▇▇▇▇▇ shall be entitled to participate in Company insurance plans, pension
and other employee benefits provided to other senior executives of the Company, in accordance with
the terms and conditions contained therein.
6. Termination.
(A) The Company may terminate the employment relationship at any time for any reason. If
▇▇▇▇▇▇▇▇’▇ employment is terminated by the Company for any reason other than for cause (other than
by reason of ▇▇▇▇▇▇▇▇’▇ “disability” (within the meaning of the Company’s long-term disability
policy)), ▇▇▇▇▇▇▇▇ shall be paid (i) severance in an amount equal to six months of her then annual
base salary, payable in six equal monthly installments less appropriate withholdings and deductions
required by law and (ii) a pro rata portion of any annual bonus she would otherwise have been
entitled to receive under Paragraph 4 hereof, less appropriate withholdings and deductions required
by law; such pro rata amount will be paid after year end in accordance with the Company’s customary
payroll practices and will be calculated by multiplying the annual bonus she would otherwise have
been entitled to receive under Paragraph 4 hereof by a fraction, the numerator of which is the
number of completed full months in the current fiscal year through the date of termination (by way
of example, if ▇▇▇▇▇▇▇▇ is terminated on August 16, the numerator will be seven) and the
denominator of which is 12. ▇▇▇▇▇▇▇▇ will not be entitled to and shall not receive any additional
compensation or benefits of any other type following the date of termination. If the Company
terminates the employment for cause, ▇▇▇▇▇▇▇▇ will not be entitled to and shall not receive any
severance, bonus or benefits of any type following the date of termination. Notwithstanding the
payment provisions described above, to the extent required to fall within the “short-term deferal”
exception under Section 409A of the Internal Revenue Code of 1986, as amended, all amounts payable
under this paragraph shall be paid on or prior to March 14 of the calendar year immediately
following the calendar year in which such termination occurs.
For purposes of this Agreement, “cause” for termination shall exist only if ▇▇▇▇▇▇▇▇ (i)
breaches her fiduciary duty of loyalty owed to the Company, (ii) is convicted of, or pleads guilty
or ‘no contest” to, a felony, (iii) commits willful misconduct involving acts of moral turpitude or
that otherwise result in, or could reasonably be expected to result in, material injury to the
Company or its subsidiaries, (iv) materially breaches this Agreement, (v) materially fails to
follow a written instruction of a superior or (vi) in carrying out her duties and responsibilities,
is guilty of gross neglect or gross misconduct.
(B) ▇▇▇▇▇▇▇▇ may terminate the employment relationship at any time for any reason by giving
written notice at least three (3) months prior to the effective date of termination. In the event
of termination of ▇▇▇▇▇▇▇▇’▇ employment under this Paragraph 6(B), she shall have the right to
retain all compensation and reimbursements for outstanding expenses incurred on behalf of the
Company through the effective date of termination but will not be entitled to and shall not receive
any severance, bonus or benefits of any type following the date of termination. In addition,
during such three (3) month notice period, the Company may, in its sole and absolute discretion,
prohibit ▇▇▇▇▇▇▇▇ from entering the premises of the Company for all or any portion of such notice
period (which in no event shall be treated as a termination by the Company without cause), provided
that the Company shall continue to pay to ▇▇▇▇▇▇▇▇ her then base salary and continue benefits
provided pursuant to Paragraph 5 above for the duration of the notice period.
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7. Covenants of ▇▇▇▇▇▇▇▇.
(A) At any time during and after ▇▇▇▇▇▇▇▇’▇ employment hereunder, without the prior written
consent of the Company, except to the extent required by an order of a court having jurisdiction or
under subpoena from an appropriate government agency, in which event, ▇▇▇▇▇▇▇▇ shall use her best
efforts to consult with the Company prior to responding to any such order or subpoena, and except
as required in the performance of her duties hereunder, ▇▇▇▇▇▇▇▇ shall not disclose to or use for
the benefit of any third party any Confidential Information.
(B) At any time during and after ▇▇▇▇▇▇▇▇’▇ employment hereunder and during the one (1) year
period immediately following any termination of such employment for any reason, ▇▇▇▇▇▇▇▇ shall not,
directly or indirectly, for her own account or for the account of any other individual or entity,
engage in Interfering Activities.
(C) For purposes of this Agreement:
(1) “Confidential Information” shall mean confidential or proprietary trade secrets, client
lists, client identities and information, information regarding service providers, investment
methodologies, marketing data or plans, sales plans, management organization information, operating
policies or manuals, business plans or operations or techniques, financial records or data, or
other financial, commercial, business or technical information (i) relating to the Company or any
of its affiliates or subsidiaries, or (ii) that the Company or any of its affiliates or
subsidiaries may receive belonging to suppliers, customers or others who do business with the
Company or any of its affiliates or subsidiaries, but shall exclude any information that is in the
public domain or hereafter enters the public domain, in each case without the breach by ▇▇▇▇▇▇▇▇ of
this Paragraph 7.
(2) “Interfering Activities” shall mean (i) encouraging, soliciting, or inducing, or in any
manner attempting to encourage, solicit, or induce, any individual employed by the Company or any
of its affiliates or subsidiaries to terminate such individual’s employment with the Company or any
of its affiliates or subsidiaries, or (ii) encouraging, soliciting or inducing, or in any manner
attempting to encourage, solicit or induce any client, account, customer, licensee or other
business relation of the Company or any of its affiliates or subsidiaries to cease doing business
with or reduce the amount of business conducted with the Company or any of its affiliates or
subsidiaries, or in any way interfere with the relationship between any such client, account,
customer, licensee or business relation and the Company or any of its affiliates or subsidiaries.
(D) ▇▇▇▇▇▇▇▇ acknowledges and recognizes the highly competitive nature of the Company’s
business, that access to Confidential Information renders him special and unique within the
Company’s industry, and that she will have the opportunity to develop substantial relationships
with existing and prospective clients, accounts, customers, consultants and contractors, investors
and strategic partners of the Company during the course of and as a result of her employment with
the Company. In light of the foregoing, ▇▇▇▇▇▇▇▇ acknowledges and agrees that the restrictions and
limitations set forth in this Paragraph 7 are reasonable and valid in geographical and temporal
scope and in all other respects, and are essential to protect the value of the business and assets
of the Company and its affiliates and subsidiaries.
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(E) ▇▇▇▇▇▇▇▇ expressly acknowledges that any breach or threatened breach of any of the terms
and/or conditions set forth in this Paragraph 7 may result in substantial, continuing and
irreparable injury to the Company. Therefore, ▇▇▇▇▇▇▇▇ hereby agrees that, in addition to any
other remedy that may be available to the Company, the Company shall be entitled to injunctive
relief, specific performance or other equitable relief by a court of appropriate jurisdiction in
the event of any breach or threatened breach of the terms of this Paragraph 7 without the necessity
of proving irreparable harm or injury as a result of such breach or threatened breach.
8. Change in Control.
(A) Upon any Change in Control during the term hereof, upon such Change in Control, the
Company (or its successor) shall pay ▇▇▇▇▇▇▇▇ the Change in Control Retention Payment, such amount
to be payable in cash on or as soon as administratively feasible following the consummation of such
Change in Control. To the extent that ▇▇▇▇▇▇▇▇’▇ employment with the Company continues following a
Change in Control, notwithstanding any provision of this Agreement or any other agreement between
the Company (or its affiliates) and ▇▇▇▇▇▇▇▇ to the contrary, ▇▇▇▇▇▇▇▇ shall be an “at-will”
employee, and upon any subsequent termination of employment, absent any further agreement between
the parties to the contrary, ▇▇▇▇▇▇▇▇ shall not be entitled to any severance or other similar
termination payments or benefits, whether pursuant to Section 6 of this Agreement, or by any other
plan, agreement or otherwise.
(B) Notwithstanding any provision herein to the contrary, the Change in Control Retention
Payment shall be delayed for such period of time, if any, as may be necessary to satisfy Section
409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended from time to time (the
“Code”). On the earliest date on which the Change in Control Retention Payment can be made
without violating the requirements of Section 409A(a)(2)(B)(i) of the Code, there shall be paid to
▇▇▇▇▇▇▇▇, in a single cash lump sum, an amount equal to the Change in Control Retention Payment.
(C) Definitions.
(1) “Change in Control” shall mean
(i) any Change in Control (as defined in the Company’s 1992 Stock
Option Plan (as amended and restated February 8, 2000)); or
(ii) the appointment as an executive officer of the Company, following the date hereof, of any
shareholder who beneficially owns, as of the date hereof, directly or indirectly, in excess of five
percent (5%) of the Company’s outstanding voting securities.
(2) “Change in Control Retention Payment” shall mean a lump-sum amount equal to two
times the sum of (i) ▇▇▇▇▇▇▇▇’▇ annual base salary as in effect immediately prior to the Change in
Control, plus (ii) ▇▇▇▇▇▇▇▇’▇ total bonus amount paid or payable for services performed entirely
within the year prior to the year in which the Change in Control occurs (for example, if a Change
in Control occurs in 2007, the total bonus included in the Change in Control Retention Payment
calculation will be the bonus paid or payable for services performed entirely within the Company’s
2006 fiscal year, but excludes any bonuses paid for services performed in the Company’s 2005 fiscal
year but paid during the Company’s 2006 fiscal year).
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9. Continuing Education and Professional Dues. The Company shall pay all fees and expenses
incurred in keeping ▇▇▇▇▇▇▇▇’▇ certified public accounting license current (including continuing
education and licensing fees), as well as the dues for one state and one national accounting
organization.
10. Independence; Severability. Each of the rights enumerated in this Agreement shall be
independent of the others and shall be in addition to and not in lieu of any other rights and
remedies available to the Company at law or in equity. If any of the provisions of this Agreement
or any part of any of them is hereafter construed or adjudicated to be invalid or unenforceable,
the same shall not affect the remainder of this Agreement, which shall be given full effect without
regard to the invalid portions. If any of the covenants contained herein are held to be invalid or
unenforceable because of the duration of such provisions or the area or scope covered thereby, the
parties hereto agree that the court making such determination shall have the power to reduce the
duration, scope and/or area of such provision to the maximum and/or broadest duration, scope and/or
area permissible by law and in its reduced form said provision shall then be enforceable.
11. Entire
Agreement. This Agreement contains the entire understanding of the Company and
▇▇▇▇▇▇▇▇ with respect to compensation of ▇▇▇▇▇▇▇▇ and supersedes any and all prior understandings,
written or oral. For the avoidance of doubt, this Agreement does not amend, modify, waive,
supersede, or otherwise affect the Indemnification Agreement by and between ▇▇▇▇▇▇▇▇ and the
Company dated September 11, 2006. This Agreement may not be amended, waived, discharged or
terminated orally, but only by an instrument in writing signed by both parties.
12. Applicable Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to the conflict of law principles thereof.
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IN WITNESS WHEREOF, the parties hereto have set their respective hands and seals as of the day
and year first above written.
| HAMPSHIRE GROUP, LIMITED | ||||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Interim Chief Executive Officer |
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| /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||||
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||||
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