Exhibit 10.1
EMPLOYMENT AGREEMENT
BETWEEN
HAMPSHIRE GROUP, LIMITED
AND
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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 his
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 Chief Financial Officer and Treasurer of the Company. In
such capacity, ▇▇▇▇▇▇▇ shall have duties and responsibilities typically
associated with such title, and will report directly to the Chief Executive
Officer of the Company, or such other officer or employee as may be designated
by the Chief Executive Officer from time to time. During the term of this
Agreement, ▇▇▇▇▇▇▇ shall devote substantially all of his business time, skill
and attention to the performance of his 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 his services, ▇▇▇▇▇▇▇ will be paid a base
salary of Two Hundred Ten Thousand Dollars ($210,000.00) 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.
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 his 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 he 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 he 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 his 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 his 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), he 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
2
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 ▇▇▇▇▇▇▇ his then base salary and continue benefits provided
pursuant to Paragraph 5 above for the duration of the notice period.
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 his best efforts to consult
with the Company prior to responding to any such order or subpoena, and except
as required in the performance of his 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 his
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.
3
(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 he 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 his
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.
(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.
4
(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).
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.
5
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 or the Letter Agreement each by and between ▇▇▇▇▇▇▇
and the Company dated August 21, 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.
*****
6
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/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Acting Chief Executive Officer
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
