Sample Business Contracts

Separation Agreement & Release of Claims - Liz Claiborne Inc. and Denise V. Seegal

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Denise V. Seegal
February 6, 2001

                    Separation Agreement & Release of Claims

The following  constitutes a complete separation agreement and release of claims
(hereinafter  "Agreement")  between you (including your successors,  assigns and
estate,  collectively  referred to as the "Associate")  and Liz Claiborne,  Inc.
(including  its   subsidiaries,   affiliates,   officers,   directors,   agents,
associates,  successors,  predecessors and assigns,  collectively referred to as
the  "Company")  regarding  the  terms of your  employment  and  termination  of
employment at the Company.

1.   Associate's  employment  with the  Company is  terminated  effective  as of
     December 8, 2000 (the "Termination Date").

2.   Following the effective date of this Agreement, the Company will:

     (i)  pay as severance to  Associate,  the total sum of One Million  Dollars
          and 00/100  ($1,000,000.00) ; less applicable  deductions.  The amount
          set forth in this  Section  2(i) will be paid in a lump sum within ten
          (10) days following the effectiveness of this Agreement;

     (ii) pay  Associate  an  additional  lump sum  amount  of One  Hundred  Two
          Thousand  Eight  Hundred One Dollars and 75/100  ($102,801.75)  , less
          applicable  deductions,  payable  within ten (10) days  following  the
          effective date of this Agreement; .

     (iii)if Associate  elects Cobra  coverage,  reimburse  Associate up to Four
          Hundred  Five  Dollars  and  35/100  ($405.35)  a month,  representing
          Associate's  monthly Cobra premium payments through the earlier of (i)
          the date  Associate  becomes  eligible  for  coverage  under any group
          health  plan as a result of  Reemployment  (defined  below);  and (ii)
          December 31, 2001;

     (iv) pay  Associate  the amount she would have  received,  less  applicable
          deductions,  as a result of the Company's  contribution  to the profit
          sharing component of the Liz Claiborne 401(k) Savings & Profit Sharing
          Plan  and  the  amount  she  would  have  received,   less  applicable
          deductions,  under the  Company's  "matching"  arrangement  as allowed
          under the  Supplemental  Executive  Retirement Plan (the "SERP Plan"),
          had she been an active  associate of the Company on December 31, 2000.
          Such  payment  shall  be made at the same  time  that  active  Company
          associates  eligible for such payments have such payments processed to
          their accounts under the applicable plan; and

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     (v)  pay Associate a Year 2000 bonus in  accordance  with the Company's Pay
          for Performance  Plan,  without  reduction based on her termination of
          employment and determined in good faith based on specified performance
          criteria.  Such bonus will be paid to Associate in March 2001,  at the
          same time as other senior executives of the Company receive their Year
          2000 Pay for Performance bonus.

     Except as specifically  set forth above or herein,  all other  nonstatutory
     benefits,  including,  without  limitation,  short & long term  disability,
     accidental  death  and  dismemberment,   life  insurance,  and  spouse  and
     dependent life  insurance will cease on the day following your  termination
     date,  except for  conversion  rights  provided  under such benefit plan or
     applicable  law.  "Reemployment"  as  used  in this  Agreement  shall  mean
     commencement of full-time  employment with a company other than the Company
     or an entity  primarily  owned by  Associate  and used by  Associate  to do
     consulting.  Associate agrees to notify Company of Associate's Reemployment
     within seventy-two (72) hours of such Reemployment.

3.   Associate  shall be  entitled  to  receive  financial  counseling  services
     provided by a third party group which has been retained by the Company,  on
     such terms as are made  available to other senior  Company  executives of a
     comparable  level,  for a  period  of one (1)  year  following  Associate's
     Termination Date.

4.   The  Company  shall  reimburse   Associate  all  reasonable  and  necessary
     out-of-pocket  business  expenses  incurred through the Termination Date in
     accordance with the Company's standard policy in effect at such time.

5.   The parties hereto acknowledge that the Agreement dated September 26, 1996,
     as amended by letter  agreement dated February 19, 2000  (collectively  the
     "Employment  Agreement")  shall be deemed  terminated as of the Termination
     Date, except the provisions  therein which by their terms survive.  Section
     7(b) of the Employment  Agreement  (which Section by its terms survives the
     Associate's  termination of  employment)  shall be deemed amended to delete
     Calvin Klein, Inc., Donna Karan  International,  Inc. and Polo Ralph Lauren
     Corporation from the definition of "Competing  Business" set forth therein.
     Associate  acknowledges  that Sections 6 & 7 (as amended herein) & 8 of her
     Employment  Agreement  shall survive the termination of her employment with
     the Company.

6.   Associate  shall be entitled to use the Company's  designated  outplacement
     service  at the  Company's  expense  for up to one (1) year  following  the
     Termination Date, unless Reemployment  occurs beforehand.  In lieu of using
     the  outplacement  service's  offices to conduct a job search (but  without
     waiving  Associate's  right  to use  the  assistance  of  the  outplacement
     service),  Associate shall have the option of using an office designated by
     Company, at Company's offices in the Empire State Building in New York City
     (the  "Facility")  during normal  business hours to conduct her job

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     search,  until the earliest of (a) the date Associate  finds  Reemployment;
     (b) December 31, 2001;  and (c) the date the Company  ceases  operations at
     the  Facility.  The earliest of such dates shall be known as the  "Facility
     Use Expiration  Date".  Use of such office shall include the reasonable use
     of Company's telephone system. In addition, Company shall provide Associate
     with secretarial assistance (who shall be Associate's former secretary,  if
     available)  for up to three (3) days a week during  normal  business  hours
     until the Facility Use Expiration Date. If the Facility Use Expiration Date
     occurs prior to the earlier of (i) the date Associate  finds  Reemployment,
     and  (ii)  December  31,  2001  (such  earlier  date  to be  known  as  the
     "Outplacement  Service  Expiration  Date"),  Associate shall  thereafter be
     entitled to use the offices of the Outplacement  Service to conduct her job
     search until the Outplacement Service Expiration Date.

7.   (a) The terms of the Associate's stock option awards, granted as of January
     6, 1998,  January 4, 1999 and  January 25,  2000,  shall each be amended to
     provide  that the options  under such awards  scheduled  to vest in January
     2001 and January 2002 (as set forth on Annex A attached  hereto) shall vest
     instead as of the Termination Date. Such options shall otherwise be subject
     to the terms  provided for in such awards,  except to the extent  otherwise
     provided  for in clause (b) below with respect to the  applicable  exercise

     (b) The terms of all of the Associate's outstanding stock options vested as
     of  the  Termination   Date  (including  those  options  whose  vesting  is
     accelerated  under  clause (a) above)  shall be amended to provide that the
     Associate may exercise such vested options for the twelve (12) month period
     following the Termination Date on such terms and conditions as provided for
     under such awards.

8.   Section 3.1 of the Associate's  Restricted  Transformation Share Agreement,
     dated as of January 6, 1998 (the  "Agreement"),  shall be amended to permit
     the Associate's 29,500 Restricted  Transformation Shares (as defined in the
     Agreement) to remain  outstanding solely for the purpose of permitting such
     Restricted Transformation Shares to vest to the same extent and on the same
     terms as Restricted Transformation Shares of Company executive officers are
     permitted  to vest with  respect to the  achievement  of  vesting  criteria
     during 2001.  Nothing herein is intended or shall be construed to guarantee
     any vesting of Associate's  Restricted  Transformation Shares or to provide
     that Associate's Restricted Transformation Shares are to remain outstanding
     for any other purpose. Stock certificates or book-entry  registrations with
     respect to any of the Associate's Restricted Transformation Shares which do
     not vest as  provided  for in this  Section 8 shall be  cancelled,  and the
     Dividend  Escrow Account (as defined in the Agreement)  shall  thereupon be
     terminated,  and no payment  whatsoever  shall be due to the  Associate  in
     connection with such cancellation or termination.

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9.   Associate  represents  that she does not have any claim or legal  action of
     any kind pending against the Company  (defined above),  including,  but not
     limited to, any relating to her employment  with the Company or termination
     thereof,  or otherwise  involving  facts which  occurred on or prior to the
     date on which she has signed this Agreement.

10.  In exchange  for the above  consideration,  Associate  releases and forever
     discharges the Company from any and all causes of action, claims or demands
     up to the date of this  Agreement,  known or  unknown,  including,  but not
     limited  to,  those  relating  to her  employment  with the Company and the
     termination thereof; in tort, such as wrongful or retaliatory  discharge in
     violation of public policy, for emotional  distress,  defamation,  slander,
     libel or false imprisonment; in contract, whether express or implied; under
     any Company policy,  procedure or benefit plan (except vested benefits,  if
     any,  in the  Company's  401(k)  Savings and Profit  Sharing  Plan and SERP
     Plan); for reinstatement,  attorneys fees, back pay or front pay; and under
     any federal,  state or local law or ordinance,  including,  but not limited
     to,  Title VII of the Civil  Rights Act,  the Civil Rights Acts of 1871 and
     1991, the Pregnancy  Discrimination  Act, the Americans  with  Disabilities
     Act, the Age  Discrimination  in  Employment  Act, the Employee  Retirement
     Income  Security  Act, the Federal  Family and Medical  Leave Act, the Fair
     Labor  Standards  Act,  the  Equal Pay Act,  the  Workers'  Adjustment  and
     Retraining  Notification Act, the New York Human Rights Law,  Executive Law
     Section 290, et seq. ("HRL");  the New York Retaliatory Action By Employers
     Law,  Labor Law Section  740, et seq.  ("RAEL");  the New York Civil Rights
     Law, Section 1, et seq. ("CRL"); the New York  Nondiscrimination  for Legal
     Actions  Law,  Labor Law  Section  201-d,  et seq.  ("NLAL");  the New York
     Wage-Hour  Law,  Labor Law  Section  220,  et seq.  ("NYWH");  the New York
     Workers'  Compensation Law, Section 1, et seq. ("NYWC");  the New York Wage
     Payment  Law,  Labor Law Section  190, et seq.  ("HRL");  the New York City
     Human Rights Law, N.Y.C.  Admin. Code Section 8-101, et seq. ("NYCHRL") and
     for  harassment,  discrimination  and retaliation of any kind, or any other
     cause of action.  The  foregoing  release  shall not cover any  amounts due
     under the  Separation  Agreement  or any  rights of  indemnification  under
     applicable  law or the  Company's  charter  and  bylaws  or any  rights  of
     indemnification  Associate  may be entitled  to  pursuant to the  Company's
     directors' and officers' liability insurance.

11.  By signing this Agreement,  the Company does not admit to any wrongdoing or
     violation of any  statutory,  regulatory or common law  obligation  owed to
     Associate  by  the  Company.  Accordingly,  this  Agreement  shall  not  be
     admissible in Court as an admission, but only in an action to enforce it.

12.  Associate  agrees not to apply for  reemployment  with the Company,  unless
     requested to do so by the Company.

13.  Associate  agrees to immediately  turn over any Company records or property
     in her possession  including,  without  limitation,  ID cards, keys, credit
     cards,  personal  computers,   files,  software,   business  equipment  and

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     manuals.  Notwithstanding  the immediately  preceding  sentence,  Associate
     shall be entitled to keep the SONY VAIO  laptop  computer  issued to her by
     the Company during her employment.

14.  Associate agrees to keep the terms of this Agreement  confidential  (unless
     such terms are publicly  released by Company),  and shall not disclose such
     information  to any  person  or  entity,  including,  but not  limited  to,
     current,  former or future associates of the Company.  This confidentiality
     requirement,  however,  shall not prohibit Associate from disclosure to her
     immediate family (spouse,  siblings,  parents),  accountant or attorney, if
     any, or the limitations on her activities to any potential employer,  or to
     tax agencies,  as required,  provided  that they too keep such  information
     confidential.  Associate understands that she is responsible,  not only for
     her unauthorized disclosure,  but also that by anyone to whom she discloses
     such information.

     Associate agrees that she will not solicit or encourage any former, current
     or future associate of the Company to pursue claims against the Company.

15.  Associate  understands that this Agreement covers only those claims arising
     prior to the date it was signed,  including those related to her employment
     with the Company and/or termination  thereof.  Associate  acknowledges that
     the  above-referenced  consideration  is the total payment she will receive
     from the  Company,  that it exceeds  that to which she would  otherwise  be
     entitled, and that she is not entitled to any additional payments under the
     Company's  policies or benefit or severance plans (except vested  benefits,
     if any, under the Company's 401(k) Savings and Profit Sharing Plan and SERP

16.  Associate acknowledges that she was given the opportunity to fully consider
     this  Agreement for a period of up to twenty-one  (21) days.  Associate has
     been  advised to consult  counsel as part of her review of this  Agreement.
     Associate  understands that Associate has seven (7) days from her execution
     of this document to revoke this  Agreement.  It is further  understood that
     this Agreement  shall not become  effective or enforceable nor shall any of
     the  consideration  described in this  Agreement be paid or provided by the
     Company until both parties have signed it and the seven (7) day  revocation
     period has expired whichever is later.

17.  Associate  agrees  that  if  she  should  violate  the  provisions  of  the
     Employment  Agreement which survive Associate's  termination of employment,
     or Paragraphs 9, 12, 13, 19(a) or 20 of this Agreement,  in addition to any
     and all other  equitable and legal  remedies  which may be available to it,
     the  Company  shall be  entitled  to cancel its  portion of the  Agreement,
     withhold any payment or other benefits  provided in this  Agreement  and/or
     shall be entitled to recover the  payments  already  made to  Associate  in
     accordance  with the  terms of this  Agreement,  together  with any and all
     attorney's fees incurred thereby and together with interest

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     thereon.   Associate   acknowledges  that  the  Company's  remedies  are  a
     reasonable  measure of compensation  for breach of this Agreement,  and are
     not  punitive in nature.  The  Company's  rights to recover  payments  made
     hereunder  shall  survive  for a period of two (2) years from the date such
     payment is made.

18.  If any  provision  of this  Agreement  or the  application  thereof is held
     invalid,  the invalidity  shall not affect other provisions or applications
     and to this  end  the  provisions  of this  Agreement  are  declared  to be

19.  (a) Associate shall not with willful intent to damage economically or as to
     reputation or vindictively disparage the Company, its subsidiaries or their
     respective past or present officers, directors or employees (the "Protected
     Group"),  provided  that the  foregoing  shall not apply to (i)  actions or
     statements  taken or made by the Associate while employed by the Company in
     good  faith as  fulfilling  the  Associate's  duties  with the  Company  or
     otherwise at the request of the Company,  (ii) truthful  statements made in
     compliance  with  legal  process  or  governmental  inquiry,  (iii)  as the
     Associate in good faith deems  necessary to rebut any untrue or  misleading
     public  statements  made  about  her or any other  member of the  Protected
     Group;  (iv) statements made in good faith by the Associate to rebut untrue
     or  misleading  statements  made  about  her or  any  other  member  of the
     Protected  Group by any  member  of the  Protected  Group,  and (v)  normal
     commercial puffery in a competitive  business  situation.  No member of the
     Protected Group shall be a third party beneficiary of this Section 19(a).

     (b) Company agrees to advise Paul Charron, Jorge Figueredo,  Bob Zane, John
     Thompson,  Gail Cook,  Kim Roy,  Angela  Ahrendts and Bob Negron that while
     they are  employed by Company,  not to make any negative  statements  about
     Associate,  nor do anything  which  derogates  Associate  or which  damages
     Associate in any business relationship.

20.  This Agreement constitutes the complete  understanding and entire Agreement
     of the parties and it cannot be amended, terminated,  discharged or waived,
     except by a suitable writing signed by Associate and the Company.  The laws
     of the State of New York shall govern and control  without giving effect to
     its choice of law provisions. The parties further agree that the only venue
     for any  claim a party  might  make  against  the other or for an action to
     enforce  the  terms of this  Agreement  shall be in a court of  appropriate
     jurisdiction located in the City of New York.

21.  The parties agree that should there be a question of interpretation of this
     Agreement  or a part  thereof,  there shall be no  presumption  against the
     drafter of this Agreement.

22.  Associate  fully  understands all of the terms and intent of this Agreement
     and does  hereby  execute it  voluntarily  and with full  knowledge  of its
     significance. Associate represents and acknowledges in executing this

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     Agreement that she does not rely and has not relied upon any representation
     or  statement  made  by the  Company  or by any  of the  Company's  agents,
     representatives or attorneys,  with regard to the subject matter,  basis or
     effect of this Agreement or otherwise, other than as specifically stated in
     this written Agreement.

23.  Following Associate's termination of employment with the Company, Associate
     agrees to fully  cooperate  with the Company in connection  with current or
     future  third  party  claims,  which  arise  from  matters in which she was
     involved as an executive of the Company,  which  cooperation shall include,
     without  limitation,  attendance at depositions  and court  proceedings and
     execution of affidavits and other documents in form reasonably satisfactory
     to Associate,  and at times  reasonably  convenient  to Associate  with due
     regard to her other commitments and to the Company's legal requirements.


     By: /s/Denise V. Seegal
            Denise V. Seegal

     Date:    February 7, 2001


     By: /s/Paul R. Charron
            Paul R. Charron

     Date: February 9, 2001

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                      OPTIONS VESTING      OPTIONS VESTING
AWARD DATE             JANUARY 2001          JANUARY 2002         EXERCISE PRICE

January 6, 1998            9,450                  0                   $41.125

January 4, 1999            7,000                14,000                $32.5625

January 25, 2000           12,500               12,500                $35.8125

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