Employment Agreement - Liz Claiborne Inc. and Denise V. Seegal
Dated: February 18, 2000
Denise V. Seegal
[Address]
Dear Denise,
As we have discussed, Liz Claiborne, Inc. ("Company") and you desire to
amend certain aspects of your employment agreement with the Company dated
September 25, 1996 ("Employment Agreement"), as extended by my letters to you
dated September 22, 1999 and October 25, 1999. 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 October 24, 1996 and (unless
sooner terminated as hereinafter provided) expiring on February 28, 2001 ("your
term of employment"). Thereafter, your term of employment shall be extended on
each February 28 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 November 30."
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 title and
office of, and serve in the position of, President and shall perform such
specific duties and services of a senior executive nature (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 Chairman or the Board of Directors shall reasonably request consistent with
your position, and consistent with the level of responsibility you have
exercised with the Claiborne Group prior to the date hereof. Your performance
shall be reviewed periodically in accordance with the Company's policies
applicable to its senior most executives."
3. The first (1st) sentence of Section 3(a) of the Employment
Agreement is hereby amended and restated to read in its entirety as follows:
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The Company will pay you, commencing 1999 and thereafter
during the term hereof, a base salary at an annual rate of not less than Seven
Hundred and Thirty Thousand Dollars and 00/100 ($730,000.00) 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; provided that your Annual Base Salary shall be increased (but
in no event shall it be decreased) on the date of the annual salary increase,
during the term hereof (each, an "Increase Date") by an amount equal to the
applicable Increase Rate times your Annual Base Salary in effect immediately
prior to such increase; as used herein, the term "Increase Rate" shall mean (x)
the percentage increase in the Consumer Price Index during the twelve-month
period immediately preceding the Increase Date, but not to exceed (y) the annual
salary increase guideline approved by the Compensation Committee (typically in
March) and generally applicable to all executive officers of the Company. As
used herein, the term "Consumer Price Index" means the Consumer Price Index for
All Urban Consumers - New York, prepared by the Bureau of Labor Statistics of
the United States Department of Labor, or if that Consumer Price Index is not
then being published, the most nearly comparable successor index which you and
the Company may agree upon or, if we fail to agree, an index to be designated by
the Company's independent certified public accountants, with such adjustments
necessary to permit us to carry out the provisions of this paragraph, and the
determination of such accountants shall be final and binding for purposes
hereof."
4. Sections 5 (b) and 5 (c) of the Employment Agreement are
hereby amended and restated to read in its entirety as follows:
"(b) 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. In addition, so long as you shall not have
breached your obligations to the Claiborne Group under Section 6 and 7 hereof,
or your representation under Section 11 hereof (without limitation to any other
remedy available to the Company), the Company shall pay to you, as and for a
severance payment (1) on the eighth (8th) day after the receipt from you of your
duly executed and delivered general release of the Company and the other
entities then comprising the Claiborne Group, and their respective officers,
directors, agents and representatives, in form and substance reasonably
satisfactory to the Company, within twenty-one (21) days after being provided
with a form thereof (your "General Release") (A) in substantially equal monthly
installments over the period from the date of such termination for twelve (12)
months, an aggregate amount equal to the greater of (i) what your base salary
would have been for said period (using for such purpose the base salary rate in
effect on the date of termination), or (ii) $1 million, and (B) the amount of
your out-of-pocket costs for continued medical coverage through such 12 month
period pursuant to Section 4980B of the Internal Revenue Code of 1986, as
amended, and (C) a portion of the annual bonus which you would have earned under
the provisions of Paragraph 3 (b) of the Employment Agreement (as determined by
the Company in good faith) prorated through the date of such termination; or (2)
in the event that you do not deliver
you General Release as aforesaid, a lump sum payment of $170,000. For the
purpose of this Agreement, termination of employment hereunder by you for "Good
Reason" shall mean your termination of your employment upon notice to the
Company following assignment to you of duties inconsistent with your position as
described in Section 2(a) or your being removed from such position, in either
case without your consent, which termination shall be effective thirty (30) days
after prompt notice of such circumstances by you to the Company, if such
circumstances have not been cured prior to such date."
"(c) In the event that your term of employment is terminated
(i) on account of your death of Disability, or (ii) upon the expiration of this
Agreement in accordance with its terms
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without renewal by the Company, and you then immediately leave the employ of the
Company, the Company will pay to you (or if such termination is on account of
Death, your estate) an amount equal to your accrued but unpaid base salary
through the date of such termination, plus a portion of the annual bonus which
you would have earned under the provisions of Paragraph 3(b) of the Employment
Agreement, prorated through the date of such termination."
5. Section 7 (b) of the Employment Agreement is hereby amended
and restated to read in its entirety as follows:
"(b) You agree that, during your term of employment and for a
period of six (6) months thereafter, you shall not, directly or indirectly, own,
manage, operate, join, control, participate in, invest in or otherwise be
connected or associated with, in any manner, including as an officer, director,
employee, partner, consultant, advisor, proprietor, trustee or investor, any
Competing Business in the United States; provided however that nothing contained
in this Section 9(b) shall prevent you from owning less than 2% of the voting
stock of a publicly held corporation for investment purposes. For purposes of
this Section 9(b), the term "Competing Business" shall mean Tommy Hilfiger
Corporation, Jones Apparel Group Inc., Polo Ralph Lauren Corporation, Nautica
Enterprises Inc., Donna Karan International Inc. or Calvin Klein Inc. provided
that this clause (b) shall not apply in the event the Company elects not to
renew this Agreement as set forth in Section 1 hereof and your employment
terminates at the end of the term hereof unless the Company makes the payment
provided in Section 5 (b).
6. Except to the extent specifically amended hereby, the
provisions of the Employment Agreement shall remain unmodified, and as amended
herein the Employment 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, 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: /s/Paul R. Charron
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AUTHORIZED SIGNATURE
ACCEPTED AND AGREED:
/s/Denise V. Seegal
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DENISE V. SEEGAL
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