Employment Agreement - Liz Claiborne Inc. and Paul R. Charron
Liz Claiborne, Inc.
1441 Broadway
New York, New York 10018
November 20, 1995
Mr. Paul R. Charron
[Address]
Dear Paul,
In light of your promotion to the positions of Chief Executive
Officer and President of Liz Claiborne, Inc. ("Company"), you and the Company
desire to amend certain aspects of your employment and compensation
arrangements, including certain of those contained in your Employment Agreement
with the Company dated May 9, 1994 ("Employment Agreement") and your Restricted
Stock Agreement with the Company, dated as of May 9, 1994 ("RS Agreement").
Unless otherwise noted, capitalized terms used but not defined in this letter
shall have the meanings given such terms in the Employment Agreement. We hereby
agree as follows:
1. Section 1 of the Employment Agreement is hereby
amended and restated to read in its entirety as follows:
"The Company hereby employs you, and you hereby
accept such employment and agree to serve the Claiborne Group,
upon the terms and conditions hereinafter set forth, for a
term commencing on May 9, 1994 ("your First Day") and (unless
sooner terminated as hereinafter provided) expiring on April
30, 1998 ("your term of employment"). Thereafter, your term of
employment shall be extended on each May 1 thereafter for an
additional twelve month period, unless either you or the
Company shall otherwise notify the other of an election not to
so renew by the preceding March 1."
2. Section 2(a) of the Employment Agreement is hereby
amended and restated to read in its entirety as follows:
"During your term of employment, you will hold the
titles and offices of, and serve in the positions of,
President and Chief Executive Officer of the Company, or such
more senior title(s) and office(s) as the Board of Directors
of the Company (the "Board of Directors") may assign to you.
You shall report to the Board of
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Directors and shall perform such specific duties and services
as President and Chief Executive Officer (including service as
an officer, director or equivalent position of any subsidiary,
affiliated company or venture of the Claiborne Group, without
additional compensation) as the Board of Directors shall
reasonably request consistent with your position. Your
performance shall be reviewed periodically by the Board of
Directors."
3. The first sentence of Section 4(a) of the Employment
Agreement is hereby amended and restated to read in their entirety as follows:
"Effective as of May 11, 1995, the Company will pay
you a base salary at an annual rate of not less than Seven
Hundred Twenty-Five Thousand Dollars ($725,000), subject to
annual review by the Compensation Committee of the Board of
Directors (the "Compensation Committee") and, in the
discretion of such Committee, increase from time to time.
4. Section 4(b) of the Employment Agreement is hereby
amended and restated to read in its entirety as follows:
"During your term of employment, you will
participate, in accordance with and subject to the terms and
conditions thereof, in the Company's Section162(m) Cash Bonus
Plan."
5. Section 7(b) of the Employment Agreement is hereby
amended and restated to read in its entirety as follows:
"In the event that your term of employment is
terminated (other than upon your death or Disability) during
your term of employment (i) by the Company other than for
Cause or (ii) by you for Good Reason, then the Company shall
pay to you an amount equal to your accrued but unpaid base
salary through the date of such termination and, so long as
you shall not have breached your obligations to the Claiborne
Group under Sections 8 and 9 hereof (without limitation to any
other remedy available to the Company), the Company shall
provide you with coverages substantially identical to those
provided to other similarly situated senior executives of the
Claiborne Group in its medical, dental, long-term disability
and life insurance programs (subject to insurability at
standard rates) for 12 months following the date of such
termination; in such event, the Company agrees that your
rights to continued medical coverage pursuant to Section 4980B
of the Internal Revenue Code of 1986, as amended (your "COBRA"
rights) shall be deemed to commence after the expiration of
such 12-month period. In addition, in the event that your term
of employment is terminated (other than upon your death or
Disability) during your term of employment (i) by the Company
other than for Cause or
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(ii) by you for Good Reason (A) prior to the occurrence of a
Change of Control (as hereinafter defined), the Company shall
pay to you, as and for a severance payment, the sum of
$1,750,000; or (B) on or after the occurrence of a Change of
Control, the Company shall pay to you, as and for a severance
payment, the sum of $2,250,000. For the purposes of this
Agreement, (a) termination of employment hereunder by you for
"Good Reason" shall mean your termination of your employment,
upon notice given by you to the Company within one (1) year
following your being removed from, or the assignment to you of
duties inconsistent with, your position as described in
Section 2(a), in either case without your consent, which
termination shall be effective 30 days after prompt notice of
such circumstances by you to the Company, if such
circumstances have not been cured prior to such date, and (b)
the term "Change of Control" shall have the meaning ascribed
to the term "Change in Control" in paragraph 3.7 of the
Company's 1992 Stock Incentive Plan; provided that for the
purposes of this Agreement, clause (ii) of such definition
shall not apply."
6. The following Section 2.5 is hereby added to the
RS Agreement:
"2.5. Notwithstanding any provision to the contrary
contained in this Agreement, upon your death, or Disability
during your term of employment (as such terms are defined in
your employment agreement with the Company as the same may be
amended from time to time (your "Employment Agreement")), or
in the event that your term of employment is terminated by you
for Good Reason on or after the occurrence of a Change of
Control (as such terms are defined in your Employment
Agreement), restrictions shall thereupon lapse as to all
theretofore unvested Restricted Shares, and such lapse date
shall be deemed the Vesting Date of such shares for purposes
of this Agreement."
7. Except to the extent specifically amended hereby, the
provisions of the Employment Agreement and of the RS Agreement shall remain
unmodified, and as amended herein the Employment Agreement and RS Agreement
remain in full force and effect.
If the foregoing correctly sets forth your understanding,
please indicate your acceptance by executing the enclosed copy of this letter in
the space provided below,
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following which this will be a legally binding amendment to the Employment
Agreement and RS Agreement as of the date first written above.
Very truly yours,
LIZ CLAIBORNE, INC.
By:__________________________
Jerome A. Chazen, Chairman
ACCEPTED AND AGREED:
_____________________
Paul R. Charron