Exhibit 10.7
EMPLOYMENT AGREEMENT
AGREEMENT, made and entered into as of April 14, 2003 by and between
THE WARNACO GROUP, INC., a Delaware corporation (together with its successors
and assigns, the "Company"), and XXXXXX X. XXXXXX (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to employ the Executive and to enter into
an agreement embodying the terms of such employment (together with its Exhibits,
this "Agreement") and the Executive desires to enter into this Agreement and to
accept such employment, subject to the terms and provisions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive (individually a
"Party" and together the "Parties") agree as follows:
1. Definitions.
(a) "Affiliate" of a specified person or entity shall mean a
person or entity that directly or indirectly controls, is controlled by, or is
under common control with, the person or entity specified.
(b) "Base Salary" shall mean the annualized salary provided for in
Section 4 below.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean:
(i) willful misconduct by the Executive which causes material
harm to the Company's interests, business or reputation;
(ii) willful and material breach of duty by the Executive in
the course of his employment, which is not cured within 10
days after Executive's receipt of written notice from the
Company;
(iii) willful failure by the Executive, after having been
given written notice from the Company, to perform his duties
other than a failure resulting from Executive's incapacity due
to physical or mental illness; or
(iv) indictment of the Executive for a felony, a crime
involving moral turpitude or any crime involving the business
of the Company, which is injurious to the business of the
Company.
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For purposes of this Cause definition, no act or failure to act, on the
part of the Executive, shall be considered willful unless it is done, or omitted
to be done, by him in bad faith and without reasonable belief that his action
was in the best interests of the Company.
(e) "Change in Control" shall mean any of the following:
(i) any "person" (as such term is used in Sections 3(a)(9) and
13(d) of the Securities Exchange Act of 1934) or group of
persons acting jointly or in concert, but excluding a person
who owns more than 5% of the outstanding shares of the Company
as of the Commencement Date, becomes a "beneficial owner" (as
such term is used in Rule 13d-3 promulgated under that Act),
of more than 50% of the Voting Stock of the Company;
(ii) all or substantially all of the assets of the Company are
disposed of pursuant to a merger, consolidation or other
transaction (unless the shareholders of the Company
immediately prior to such merger, consolidation or other
transaction beneficially own, directly or indirectly, in
substantially the same proportion as they owned the Voting
Stock of the Company, all of the Voting Stock or other
ownership interests of the entity or entities, if any, that
succeed to the business of the Company); or
(iii) approval by the shareholders of the Company of a
complete liquidation or dissolution of all or substantially
all of the assets of the Company.
For purposes of this Change in Control definition, "Voting Stock" shall
mean the capital stock of any class or classes having general voting power, in
the absence of specified contingencies, to elect the directors of the Company.
(f) "Commencement Date" shall mean April 15, 2003.
(g) "Date of Termination" shall mean:
(i) if the Executive's employment is terminated by the
Company, the date specified in the notice by the Company to
the Executive that his employment is so terminated;
(ii) if the Executive voluntarily resigns his employment, 90
days after receipt by the Company of written notice that the
Executive is terminating his employment (provided, that the
Company may accelerate the Date of Termination to an earlier
date by providing the Executive with written notice of such
action, or, alternatively, the Company may place the Executive
on paid leave (covering only Base Salary) during such period);
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(iii) if the Executive's employment is terminated by reason of
death, the date of death; or
(iv) if the Executive resigns his employment for Good Reason,
30 days after receipt by the Company of timely written notice
from the Executive in accordance with Section 1(i) below
unless the Company cures the event or events giving rise to
Good Reason within 30 days after receipt of such written
notice.
(h) "Disability" shall mean the Executive's inability, due to
physical or mental incapacity, to substantially perform his duties and
responsibilities for a period of 180 consecutive days as determined by a medical
doctor selected by the Company and reasonably acceptable to the Executive.
(i) "Good Reason" shall mean the occurrence of any of the
following without the Executive's prior written consent:
(i) a material diminution in the Executive's authority, duties
or responsibilities as Chief Executive Officer of the Company
or the assignment to the Executive of any duties materially
inconsistent with such position;
(ii) a reduction in the Executive's Base Salary or Target
Bonus opportunity (as a percentage of Base Salary);
(iii) a change in reporting structure so that the Executive
reports to someone other than the Board, or the Chairman of
the Board as the Board's designee;
(iv) the failure by the Company to nominate or renominate the
Executive as a member of the Board, or the removal by the
Company of the Executive as President and Chief Executive
Officer of the Company or the removal of the Executive from
the Board (other than due to a failure of shareholders of the
Company to elect him);
(v) requiring the Executive to be principally based at any
office or location more than 50 miles from mid-town Manhattan;
or
(vi) the failure of a successor to all or substantially all of
the assets of the Company to assume the Company's obligations
under this Agreement either as a matter of law or in writing
within 15 days after a merger, consolidation, sale or similar
transaction.
Anything herein to the contrary notwithstanding, the Executive shall
not be entitled to resign for Good Reason unless the Executive gives the Company
written notice of the event
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constituting "Good Reason" within 90 days of the occurrence of such event and
the Company fails to cure such event within 30 days after receipt of such
notice.
(j) "Initial Term" shall mean the period beginning on the
Commencement Date and ending at the close of business on the second anniversary
of the Commencement Date.
(k) "Option" shall have the meaning ascribed to such term in
Section 6(b) below.
(l) "Restricted Stock" shall have the meaning ascribed to such
term in Section 6(a) below.
(m) "Target Bonus" shall have the meaning ascribed to such term in
Section 5 below.
(n) "Term" shall have the meaning ascribed to such term in Section
2 below.
2. Term of Employment.
The term of the Executive's employment hereunder shall begin on the
Commencement Date and end at the close of business on the second anniversary of
the Commencement Date (the "Initial Term"); provided, however, that the Initial
Term shall thereafter be automatically extended for additional one-year periods
(together with the Initial Term, the "Term") unless either the Company or the
Executive gives the other written notice at least 180 days prior to the
then-scheduled expiration of the Term that such Party is electing not to so
extend the Term. Notwithstanding the foregoing, the Term shall end on the date
on which the Executive's employment is terminated by either Party in accordance
with the provisions herein.
3. Position; Duties and Responsibilities.
During the Term, the Executive shall be employed as the President and
Chief Executive Officer of the Company and shall be responsible for the general
management of the affairs of the Company and shall perform such other duties and
responsibilities as determined by the Board. It is also the intention of the
Parties that the Executive shall be nominated by the Company for election as a
member of the Board. The Executive, in carrying out his duties under this
Agreement, shall report to the Board or the Chairman of the Board as the Board's
designee. Anything herein to the contrary notwithstanding, nothing shall
preclude the Executive from (i) subject to the reasonable approval of the Board,
serving on the boards of directors of trade associations and/or charitable
organizations or another business corporation (provided such service is not
prohibited under Section 11(a) below), (ii) engaging in charitable activities
and community affairs and (iii) managing his personal investments and affairs,
provided that the activities described in the preceding clauses (i) through
(iii) do not materially interfere with the proper performance of his duties and
responsibilities hereunder.
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4. Base Salary.
During the Term, the Executive shall be paid an annualized Base Salary
of $900,000, payable in accordance with the regular payroll practices of the
Company. During the Initial Term, the Base Salary shall be fixed and not subject
to review by the Board. During the Term that extends beyond the Initial Term,
the Base Salary may be increased, but not decreased, from time to time by the
Board. The Executive shall not be entitled to any compensation for service as a
member of the Board or for service as an officer or member of any board of
directors of any Affiliate.
5. Annual Incentive Awards.
During the Term, the Executive shall be eligible to receive an annual
incentive award with a target of 100% of Base Salary ("Target Bonus"), with a
potential maximum award of up to 165% of Base Salary, in all events based on the
Executive's achievement of annual performance and other targets approved by the
Board. The amount and payment of any such award shall be determined in
accordance with the Company's practices for awarding annual incentive awards to
senior executives. A prorata annual incentive award for any fiscal period of
less than a full fiscal year for which an incentive award becomes payable
hereunder, including, without limitation, the period of the Executive's
employment during fiscal year 2003 and, if the Term is not renewed, fiscal year
2005, shall be calculated by multiplying the annual incentive award the
Executive would have been entitled to receive if he had been employed for a full
fiscal year based on the Target Bonus and the Company's achievement of the
applicable performance targets by a fraction, the numerator of which is the
number of days that the Executive was employed during the applicable fiscal year
and the denominator of which is 365. Anything herein to the contrary
notwithstanding, for fiscal year 2003, the Executive shall receive an annual
incentive award of not less than 50% of the Base Salary paid to the Executive
during such fiscal year. Any annual incentive award, including any annual
incentive award for fiscal year 2003, shall be payable when bonuses for the
applicable performance period are paid to other senior executives of the
Company.
6. Long-Term Incentive Awards.
(a) Restricted Stock Award. On the Commencement Date, the Company
shall grant the Executive an award of 150,000 shares of restricted stock (the
"Restricted Stock") pursuant to the Company's 2003 Stock Incentive Plan (the
"Plan"). Except as otherwise provided herein, the Restricted Stock shall vest
25% on September 12, 2003 and shall vest 25% on each of the first, second and
third anniversaries of such date, provided that the Executive is employed on
such vesting date and has not given notice to the Company that he is voluntarily
resigning prior to such vesting date. Upon a Change in Control during the Term,
all unvested Restricted Stock shall immediately vest. The form of the Restricted
Stock Award Agreement for the Restricted Stock is attached hereto as Exhibit A.
(b) Stock Option Award. On the Commencement Date, the Company
shall grant the Executive a 10-year option to purchase 600,000 shares of the
Company's common
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stock (the "Option"), pursuant to the Plan at an exercise price equal to the
Fair Market Value (as defined in the Plan) of the Company's common stock on the
Commencement Date. The Option shall vest and become exercisable 25% on September
12, 2003 and shall vest 25% on each of the first, second and third anniversaries
of such date, provided that the Executive is employed on such vesting date and
has not been given notice to the Company that he is voluntarily resigning prior
to such vesting date. Upon a Change in Control during the Term, any portion of
the Option which is unvested shall immediately vest and become exercisable and
remain exercisable for the balance of its originally scheduled term. The form of
the Non-Qualified Stock Option Agreement for the Option is attached hereto as
Exhibit B.
(c) Other Conditions. The Executive shall be subject to the equity
ownership, retention and other requirements applicable to senior executives of
the Company. Except as otherwise expressly provided herein, all equity grants
shall be governed by the applicable plan and award agreement.
7. Employee Benefit Programs.
During the Term, the Executive shall be entitled to participate in all
employee savings and welfare benefit plans and programs made available to the
Company's senior-level executives on a basis no less favorable than provided to
other similarly situated executives, as such plans or programs may be in effect
from time to time, including, without limitation, savings and other retirement
plans or programs, medical, dental, hospitalization, short-term and long-term
disability and life insurance plans, accidental death and dismemberment
protection and travel accident insurance. In addition, during the Term, the
Executive shall be entitled to Company-paid term life insurance with a benefit
equal to $1 million, provided the Company can obtain such insurance at
commercially reasonable premium levels.
8. Reimbursement of Business and Other Expenses; Perquisites;
Vacations.
(a) During the Term, the Executive is authorized to incur
reasonable expenses in carrying out his duties and responsibilities under this
Agreement and the Company shall promptly reimburse him for all business and
entertainment expenses incurred in connection with carrying out the business of
the Company, subject to documentation in accordance with the Company's policy.
The Executive shall be entitled to first class air travel when traveling on
Company business. In addition, the Company will reimburse the Executive for his
legal and other professional fees incurred in negotiating this Agreement up to a
maximum of $25,000.
(b) The Executive shall be entitled to perquisites provided to
other senior-level executives, including a monthly car allowance of up to a
maximum of $1,500.
(c) The Executive shall be entitled to four weeks paid vacation
per calendar year.
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9. Termination of Employment.
(a) Termination Without Cause by the Company or Resignation for
Good Reason by the Executive. In the event the Executive's employment is
terminated without Cause by the Company (other than upon death or due to
Disability) or the Executive resigns for Good Reason (other than due to
Disability), the Executive shall be entitled to:
(i) Base Salary through the Date of Termination;
(ii) any unpaid bonus earned with respect to any fiscal year
preceding the Date of Termination;
(iii) payment of Base Salary as salary continuation for the
remainder of the applicable Term (without regard to its
earlier termination hereunder), but in no event less than 12
months;
(iv) a prorata bonus for the fiscal year in which the Date of
Termination occurs (determined by multiplying the amount the
Executive would have received had employment continued through
the end of such fiscal year by a fraction, the numerator of
which is the number of days during such fiscal year that the
Executive is employed by the Company and the denominator of
which is 365), payable when bonuses for such fiscal year are
paid to other Company executives;
(v) immediate vesting of 50% of the Restricted Stock that
remains unvested as of the Date of Termination;
(vi) that portion of the Option that has vested as of the Date
of Termination remaining exercisable for two years following
the Date of Termination;
(vii) continued participation for the Executive and his
eligible dependents in the Company's welfare benefit plans in
which he and his eligible dependents were participating
immediately prior to the Date of Termination until the earlier
of (a) the end of the applicable Term (without regard to its
earlier termination hereunder), but in no event less than 12
months, or (b) the date, or dates, the Executive receives
equivalent coverage under the plans and programs of a
subsequent employer;
(viii) any amounts earned, accrued or owing to the Executive
but not yet paid under Section 8 above; and
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(ix) except as otherwise provided in Section 9(f) below,
additional entitlements, if any, in accordance with applicable
plans and programs of the Company.
(b) Termination upon Death or due to Disability. In the event the
Executive's employment is terminated upon death or due to Disability, the
Executive (or his estate or legal representative, as the case may be) shall be
entitled to:
(i) Base Salary through the Date of Termination;
(ii) any unpaid bonus earned with respect to any fiscal year
preceding the Date of Termination;
(iii) a prorata bonus for the fiscal year in which the Date of
Termination occurs (determined by multiplying the amount the
Executive would have received had employment continued through
the end of such fiscal year by a fraction, the numerator of
which is the number of days during such fiscal year that the
Executive is employed by the Company and the denominator of
which is 365), payable when bonuses for such fiscal year are
paid to other Company executives;
(iv) immediate vesting of 50% of the Restricted Stock that
remains unvested as of the Date of Termination;
(v) that portion of the Option that has vested as of the Date
of Termination remaining exercisable for one year following
the Date of Termination;
(vi) any amounts earned, accrued or owing to the Executive but
not yet paid under Section 8 above; and
(vii) additional entitlements, if any, in accordance with
applicable plans and programs of the Company.
(c) Termination by the Company for Cause or a Voluntary
Resignation by the Executive. In the event the Company terminates the
Executive's employment for Cause or the Executive voluntarily resigns, the
Executive shall be entitled to:
(i) Base Salary through the Date of Termination;
(ii) any amounts earned, accrued or owing to the Executive but
not yet paid under Section 8 above; and
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(iii) additional entitlements, if any, in accordance with
applicable plans and programs of the Company.
The Restricted Stock and that portion of the Option that remains
unvested as of the Date of Termination shall be forfeited. A voluntary
resignation by the Executive of his employment shall be effective upon 90 days
prior written notice by the Executive to the Company, subject to earlier
termination by the Company as provided in Section 1(g)(ii) above, and, provided
such notice is given, shall not be deemed a breach of this Agreement.
(d) Termination without Cause by the Company or Resignation for
Good Reason by the Executive Within One Year Following a Change in Control. In
the event the Executive's employment is terminated without Cause by the Company
(other than upon death or due to Disability) or the Executive resigns for Good
Reason (other than due to Disability), in both cases within one year following a
Change in Control (provided the Term is still in effect or has expired during
this one-year period), the Executive shall be entitled to:
(i) Base Salary through the Date of Termination;
(ii) payment of Base Salary for the remainder of the
applicable Term (without regard to its earlier termination
hereunder), but in no event less than 18 months, payable in a
lump sum (without discount) promptly following the Date of
Termination;
(iii) any unpaid bonus earned with respect to any fiscal year
preceding the Date of Termination, payable promptly following
the Date of Termination;
(iv) a prorata bonus for the fiscal year in which the Date of
Termination occurs (determined by multiplying the amount the
Executive would have received had employment continued through
the end of such fiscal year by a fraction, the numerator of
which is the number of days during such fiscal year that the
Executive is employed by the Company and the denominator of
which is 365), payable when bonuses for such fiscal year are
paid to other Company executives;
(v) continued participation for the Executive and his eligible
dependents in the Company's welfare benefit plans in which he
and his eligible dependents were participating immediately
prior to the Date of Termination until the earlier of (a) the
end of the applicable Term (without regard to its earlier
termination hereunder), but in no event less than 18 months,
or (b) the date, or dates, the Executive receives
substantially equivalent coverage under the plans and programs
of a subsequent employer;
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(vi) any amounts earned, accrued or owing to the Executive but
not yet paid under Section 8 above; and
(vii) except as otherwise provided in Section 9(f) below,
additional entitlements, if any, in accordance with applicable
plans and programs of the Company.
(e) Termination of the Executive's Employment by the Company Upon
the Expiration of the Term. If the Company provides written notice to the
Executive in accordance with Section 2 above that the Term shall not renew and
upon such expiration of the Term the Company terminates the Executive's
employment under circumstances that during the Term would constitute a
termination of employment without Cause, the Executive shall be entitled to:
(i) Base Salary through the Date of Termination;
(ii) payment of Base Salary as salary continuation for six
months following the Date of Termination;
(iii) that portion of the Option that has vested as of the
Date of Termination remaining exercisable for nine months
following the Date of Termination;
(iv) continued participation for the Executive and his
eligible dependents in the Company welfare benefit plans in
which he and his eligible dependents were participating
immediately prior to the expiration of the Term for six months
following the Date of Termination;
(v) any amounts earned, accrued or owing to the Executive but
not yet paid under Section 8 above; and
(vi) except as otherwise provided in Section 9(f) below,
additional entitlements, if any, in accordance with applicable
plans and programs of the Company.
(f) Exclusivity of Benefits; Release of Claims. Any payments
provided pursuant to Section 9(a), Section 9(d) or Section 9(e) above shall be
in lieu of any salary continuation arrangements under any other severance
program of the Company. In order to be entitled to the payments, rights and
other entitlements in Section 9(a), Section 9(d) or Section 9(e) above, the
Executive shall be required to execute and deliver a release of claims against
the Company in the form of Exhibit C attached hereto and not revoke such release
within the applicable revocation period. Upon the execution by the Executive and
delivery to the Company of such release of claims (provided the Executive does
not revoke such release within the applicable revocation period), the Company
agrees to execute a release of claims against the Executive in the form of
Exhibit D attached hereto and to deliver such release to the Executive.
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(g) Nature of Payments. Any amounts due under this Section 9 are
in the nature of severance payments considered to be reasonable by the Company
and are not in the nature of a penalty.
(h) No Mitigation; No Offset. In the event of termination of his
employment for any reason, the Executive shall be under no obligation to seek
other employment and, except as specifically provided for in this Section 9,
there shall be no offset against amounts due to him on account of any
remuneration or benefits provided by any subsequent employment he may obtain.
(i) Resignation. Notwithstanding any other provision of this
Agreement, upon the termination of the Executive's employment for any reason,
unless otherwise requested by the Board, he shall immediately resign from the
Board, from all boards of directors of any Affiliate of the Company of which he
may be a member, and as a trustee of, or fiduciary to, any employee benefit
plans of the Company or any Affiliate. The Executive hereby agrees to execute
any and all documentation of such resignations upon request by the Company, but
he shall be treated for all purposes as having so resigned upon termination of
his employment, regardless of when or whether he executes any such
documentation.
10. Confidentiality; Assignment of Rights; Return of Company
Property.
(a) During the Term and thereafter, other than in the ordinary
course of performing his duties for the Company or as required in connection
with providing any cooperation to the Company pursuant to Section 13 below, the
Executive agrees that he shall not disclose to anyone or make use of any trade
secret or proprietary or confidential information of the Company or any
Affiliate of the Company, including such trade secret or proprietary or
confidential information of any customer or other entity to which the Company
owes an obligation not to disclose such information, which he acquires during
the course of his employment, including, but not limited to, records kept in the
ordinary course of business, except when required to do so by a court of law, by
any governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee
thereof) with apparent or actual jurisdiction to order him to divulge, disclose
or make accessible such information. In the event the Executive is requested to
disclose information as contemplated in the preceding sentence, the Executive
agrees, unless otherwise prohibited by law, to give the Company's General
Counsel prompt written notice of any request for disclosure in advance of the
Executive making such disclosure in order to permit the Company a reasonable
opportunity to challenge such disclosure. The foregoing shall not apply to
information that (i) was known to the public prior to its disclosure by the
Executive; or (ii) becomes known to the public through no wrongful disclosure by
or act of the Executive or any representative of the Executive.
(b) The Executive hereby sells, assigns and transfers to the
Company all of his right, title and interest in and to all inventions,
discoveries, improvements and copyrightable subject matter (the "Rights") which
during the period of his employment are made or conceived by him, alone or with
others, and which are within or arise out of any general field of the
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Company's business or arise out of any work he performs, or information he
receives regarding the business of the Company, while employed by the Company.
The Executive shall fully disclose to the Company as promptly as available all
information known or possessed by him concerning any Rights, and upon request by
the Company and without any further remuneration in any form to him by the
Company, but at the expense of the Company, execute all applications for patents
and for copyright registration, assignments thereof and other instruments and do
all things which the Company may deem necessary to vest and maintain in it the
entire right, title and interest in and to all such Rights.
(c) The Executive agrees that at the time of the termination of
employment, whether at the instance of the Executive or the Company, and
regardless of the reasons therefore, he will promptly deliver to the Company's
General Counsel, and not keep or deliver to anyone else, any and all of the
following which is in his possession or control: (i) Company property
(including, without limitation, credit cards, computers, communication devices,
home office equipment and other Company tangible property) and (ii) notes,
files, memoranda, papers and, in general, any and all physical matter and
computer files containing confidential or proprietary information of the Company
or any of its Affiliates, including any and all documents relating to the
conduct of the business of the Company or any of its Affiliates and any and all
documents containing confidential or proprietary information of the customers of
the Company or any of its Affiliates, except for (x) any documents for which the
Company's General Counsel has given written consent to removal at the time of
termination of the Executive's employment and (y) any information necessary for
the Executive to retain for his tax purposes.
11. Non-Competition; Non-Solicitation.
(a) The Executive acknowledges that in his capacity in management
the Executive has had or will have a great deal of exposure and access of the
Company's trade secrets and confidential and proprietary information. Therefore,
during the Term and thereafter (provided the Executive is employed by the
Company) and for 12 months following the Date of Termination or, for six months
following the Date of Termination if the Executive is entitled to receive
severance under Section 9(e) above, to protect the Company's trade secrets and
other confidential and proprietary information, the Executive agrees that he
shall not, other than in the ordinary course of performing his duties hereunder
or as agreed by the Company in writing, engage in a "Competitive Business,"
directly or indirectly, as an individual, partner, shareholder, director,
officer, principal, agent, employee, trustee, consultant, or in any relationship
or capacity, in any geographic location in which the Company or any of its
Affiliates is engaged in business. The Executive shall not be deemed to be in
violation of this Section 11(a) by reason of the fact that he owns or acquires,
solely as an investment, up to two percent (2%) of the outstanding equity
securities (measured by value) of any entity. "Competitive Business" shall mean
a business engaged in (x) apparel design and/or apparel wholesaling or (y)
retailing in competition with any business that the Company is conducting at the
time of the alleged violation.
(b) The Executive agrees that for a period of 18 months following
the Date of Termination, he will not, without the prior written consent of the
Company, directly or indirectly, hire any employee of the Company or any of its
Affiliates, or solicit or encourage any such
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employee to leave the employ of the Company or its Affiliates, as the case may
be.
(c) The Executive agrees that for a period of 18 months following
the Date of Termination, he will not, without the prior written consent of the
Company, directly or indirectly, solicit or encourage any customer of the
Company or any of its Affiliates to reduce or cease its business with the
Company or any such Affiliate or otherwise interfere with the relationship of
the Company or any Affiliate with its customers.
12. Injunctive and Other Relief.
The Executive expressly agrees and acknowledges any breach or
threatened breach of any obligation under Section 10 or Section 11 above will
cause the Company irreparable harm for which there is no adequate remedy at law,
and as a result of this the Company shall be entitled to seek the issuance by a
court of competent jurisdiction of an injunction, restraining order or other
equitable relief in favor of itself, without the necessity of posting a bond,
restraining the Executive from committing or continuing to commit any such
violation. If the Company defers or withholds payment of any amount otherwise
payable under this Agreement on the basis of an asserted violation of any
provision of Section 10 or Section 11, and it is subsequently finally determined
that the Executive did not commit such violation, the Company shall promptly pay
all such unpaid amounts to the Executive.
13. Cooperation.
Following the Date of Termination, upon reasonable request by the
Company, the Executive shall cooperate with the Company or any of its Affiliates
with respect to any legal or investigatory proceeding, including any government
or regulatory investigation, or any litigation or other dispute relating to any
matter in which he was involved or had knowledge during his employment with the
Company, subject to his reasonable personal and business schedules. The Company
shall reimburse the Executive for all reasonable out-of-pocket costs, such as
travel, hotel and meal expenses, incurred by the Executive in providing any
cooperation pursuant to this Section 13.
14. Representations and Covenants.
(a) The Executive represents and warrants that he has the free and
unfettered right to enter into this Agreement and to perform his obligations
under it and that he knows of no agreement between him and any other person,
firm or organization, or any law or regulation, that would be violated by the
performance of his obligations under this Agreement. The Executive agrees that
he will not use or disclose any confidential or proprietary information of any
prior employer in the course of performing his duties for the Company or any of
its Affiliates.
(b) The Company represents that (i) the execution of this
Agreement and the granting of the benefits and awards hereunder have been
authorized by the Company, including, where necessary, by the Board, (ii) the
execution, delivery and performance of this Agreement does not violate any law,
regulation, order, decree, agreement, plan or corporate governance
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document of the Company and (iii) upon the execution and delivery of this
Agreement by the Parties, it shall be the valid and binding obligation of the
Company enforceable against it in accordance with its terms, except to the
extent that enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting the enforcement of creditors' rights generally.
15. Assignability; Binding Nature.
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs (in the case of the Executive)
and assigns. For purposes of this Section 15, a successor to the Company shall
be limited to an entity which shall have acquired all or substantially all of
the business and/or assets of the Company and shall have assumed (whether by
agreement or operation of law) the Company's rights and obligations under this
Agreement. No rights or obligations of the Executive under this Agreement may be
assigned or transferred by the Executive other than his rights to compensation
and benefits, which may be transferred only by will, operation of law or in
accordance with Section 21 below.
16. Entire Agreement.
This Agreement contains the entire understanding and agreement between
the Parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the Parties with respect thereto.
17. Amendment or Waiver.
No provision in this Agreement may be amended unless such amendment is
agreed to in writing and signed by the Executive and an authorized officer of
the Company. No waiver by either Party of any breach by the other Party of any
condition or provision contained in this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same or any prior or subsequent time. Any waiver must be in writing and
signed by the Party against whom it is being enforced (either the Executive or
an authorized officer of the Company, as the case may be).
18. Severability.
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
19. Survivorship.
The respective rights and obligations of the Parties hereunder,
including, without limitation, Section 10 (confidentiality; assignment of
rights; return of Company property), Section 11 (non-competition;
non-solicitation), Section 12 (injunctive and other relief), Section
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13 (cooperation), Section 20 (indemnification and liability insurance) and
Section 23 (resolution of disputes), shall survive any expiration of the Term,
including expiration thereof upon the Executive's termination of employment for
whatever reason, to the extent necessary to the intended preservation of such
rights and obligations. Upon the expiration of the Term, the reference to "Date
of Termination" in Section 11 and Section 13 above shall refer to the
Executive's last day of employment with the Company.
20. Indemnification and Liability Insurance.
The Company hereby agrees during, and after termination of, his
employment to indemnify the Executive and hold him harmless, both during the
Term and thereafter, to the fullest extent permitted by law and under the
certificate of incorporation and by-laws of the Company against and in respect
of any and all actions, suits, proceedings, claims, demands, judgments, costs,
expenses (including reasonable attorneys' fees), losses, amounts paid in
settlement to the extent approved by the Company, and damages resulting from the
Executive's good faith performance of his duties as an officer or director of
the Company or any affiliate. The Company shall reimburse the Executive for
expenses incurred by him in connection with any proceeding hereunder upon
written request from the Executive for such reimbursement and the submission by
the Executive of the appropriate documentation associated with these expenses.
Such request shall include an undertaking by the Executive to repay the amount
of such advance or reimbursement if it shall ultimately be determined that he is
not entitled to be indemnified hereunder against such costs and expenses. The
Company shall use commercially reasonable efforts to obtain and maintain
directors' and officers' liability insurance covering the Executive to the same
extent as the Company covers its other officers and directors.
21. Beneficiaries/References.
The Executive shall be entitled, to the extent permitted under
applicable plans, agreements or law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
the Executive's death by giving the Company written notice thereof. In the event
of the Executive's death or a judicial determination of his incompetence,
reference in this Agreement to the Executive shall be deemed, where appropriate,
to refer to his beneficiary, estate or other legal representative.
22. Governing Law.
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of New York without reference to principles of
conflicts of law, provided, however, that Federal law shall apply to the
interpretation or enforcement of Section 23 below.
23. Resolution of Disputes.
Except as otherwise provided in Section 12 above, any controversy,
dispute or claim arising under or relating to this Agreement, the Executive's
employment with the Company or any Affiliate or the termination thereof shall,
at the election of the Executive or the Company
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(unless otherwise provided in an applicable Company plan, program or agreement),
be resolved by confidential and binding arbitration, to be held in the borough
of Manhattan in New York City in accordance with the rules and procedures of the
Commercial Arbitration Rules of the American Arbitration Association. Judgment
upon the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. Each Party shall be responsible for its own costs and
expenses, including attorneys' fees, and neither Party shall be liable for
punitive or exemplary damages.
24. Notices.
Any notice given to a Party shall be in writing and shall be deemed to
have been given (i) when delivered personally (provided that a written
acknowledgement of receipt is obtained), (ii) three days after being sent by
certified or registered mail, postage prepaid, return receipt requested or (iii)
two days after being sent by overnight courier (provided that a written
acknowledgement of receipt is obtained by the overnight courier), with any such
notice duly addressed to the Party concerned at the address indicated below or
to such other address as such Party may subsequently designate by written notice
in accordance with this Section 24:
If to the Company: The Warnaco Group, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
If to the Executive: Xxxxxx X. Xxxxxx
0000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
25. Withholdings.
The Company may withhold from any amounts payable under this Agreement
such Federal, state, local or other taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
26. Headings.
The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
27. Counterparts.
This Agreement may be executed in two or more counterparts.
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28. Conditions.
The effectiveness of this Agreement is conditioned upon the following:
(a) there being no agreement as of the Commencement Date between the
Executive and any prior employer that interferes, or could interfere with, his
employment with the Company unless such agreement is to the satisfaction of the
Company waived by such prior employer; and
(b) the Executive's successful completion of the Company's standard
pre-employment checks prior to the Commencement Date.
[Rest of the page left intentionally blank.]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
THE WARNACO GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Senior Vice President - Corporate Development
and Chief Administrative Officer
THE EXECUTIVE
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx
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