Exhibit 10.1
G-III APPAREL GROUP, LTD.
EXECUTIVE TRANSITION AGREEMENT
WITH [NAME OF EXECUTIVE]
AGREEMENT made as of the  _____ day of  _____, 2011, by and between G-III
APPAREL GROUP, LTD. (the “Company”) and  _____  (the “Executive”).
WITNESSETH:
WHEREAS, the Executive is employed as a senior executive officer of the Company;
and
WHEREAS, the parties desire that certain severance protections be afforded to
the Executive in the event of involuntary termination of the Executive’s
employment in conjunction with a “change in control” of the Company, as
described herein;
NOW, THEREFORE, the parties agree as follows:
1. Severance Protection.
1.1 Severance Events. Subject to the provisions of this Agreement, the Executive
will receive the severance payments and benefits described in Section 1.2 if a
Change in Control (as defined below) occurs and, at any time during the
(a) three-month period prior to the date of the Change in Control or
(b) two-year period beginning on the date of the Change in Control, (i) the
Company terminates the Executive’s employment without Cause (as defined below),
or (ii) the Executive terminates the Executive’s employment for Good Reason (as
defined below). For the purposes hereof, the term “Company” shall be deemed to
include the Company, any subsidiary of the Company and, following a Change in
Control, any direct or indirect successor to the Company.
1.2 Severance Payments and Benefits. If a severance event described in
Section 1.1 occurs, then, subject to timely compliance with the release
condition specified in Section 2 below, the Executive will be entitled to
receive the following severance payments and benefits:
(a) an amount equal to 1.5 times the sum of (a) the Executive’s highest annual
rate of salary in effect during the one-year period preceding the date the
Executive’s employment terminates, plus (b) the average annual cash bonus earned
by the Executive during the two fiscal years preceding the fiscal year in which
the Executive’s employment terminates, which amount will be payable in equal
periodic installments during the 18-month period following the termination of
the Executive’s employment in accordance with normal payroll practices (for
purposes of Section 409A of the Code, this series of installment payments is
treated as a right to a series of separate payments), subject to delayed
commencement and related make-up payment provisions set forth in Sections 2 and
11 of this Agreement; and

 

--------------------------------------------------------------------------------

 

(b) if, immediately before the termination of the Executive’s employment, the
Executive and/or the Executive’s spouse and/or any of the Executive’s dependents
participates (other than via COBRA) in a Company group health plan, then, for
the 18 months following the date of such termination (or, if sooner, until
corresponding coverage is obtained under a successor employer’s plan), the
Executive and/or such spouse and/or dependents may elect to continue
participating in the Company’s plan at the same benefit and contribution levels
and on the same basis as if the Executive’s employment had continued (which
continuing participation will be deemed to be in addition to and not in lieu of
COBRA); provided, however, that, if provision of such coverage is not permitted
by the plan or by applicable law or would otherwise cause the Company to incur a
penalty or additional tax, then, in lieu of such coverage, the Company will
provide COBRA continuation coverage to the Executive, and the Executive’s spouse
and/or dependents, at the Company’s sole expense, if and to the extent any of
such persons elects and is entitled to receive COBRA continuation coverage, and,
pursuant to applicable tax laws, the amount of the Company’s subsidy will be
reported as W-2 wage income to the Executive.
1.3 Definitions. For the purposes hereof, the following terms shall have the
following meanings:
(a) “Cause” means (1) the Executive’s repeated failure or refusal to perform the
duties of the Executive’s employment, consistent with past practice and his
position and title where such conduct shall not have ceased or been remedied
within ten days following written warning from the Company specifying such
conduct; (2) the Executive’s conviction of, or entering a plea of guilty or no
contest to, a felony; (3) the Executive’s performance of any act or the
Executive’s failure to act, for which, if the Executive were prosecuted and
convicted, a crime or offense involving money or property of the Company would
have occurred; (4) the Executive’s performance of any act or the Executive’s
failure to act which constitutes fraud or a breach of a fiduciary trust,
including, without limitation, misappropriation of funds or a material
misrepresentation of the Company’s operating results or financial condition;
(5) any attempt by the Executive to secure any personal profit (other than
pursuant to the terms of the Executive’s employment or through the Executive’s
ownership of equity in the Company) in connection with the business of the
Company (for example, without limitation, using Company assets to pursue other
interests, diverting to the Executive or to a third party any business
opportunity belonging to the Company, insider trading or taking bribes or
kickbacks); (6) the Executive’s engagement in conduct or activities materially
damaging to the property, business or reputation of the Company other than as a
result of good faith performance of his duties; (7) the Executive’s illegal use
of controlled substances; (8) any act or omission by the Executive involving
malfeasance or gross negligence in the performance of the duties of the
Executive’s employment to the material detriment of the Company; or (9) the
entry of any order of a court that remains in effect and is not discharged for a
period of at least sixty days, which enjoins or otherwise limits or restricts
the performance by the Executive of the duties of the Executive’s employment,
relating to any contract, agreement or commitment made by or applicable to the
Executive in favor of any former employer or any other person.

 

- 2 -

--------------------------------------------------------------------------------

 

(b) “Change in Control” means (i) the consummation of (A) any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company’s voting stock would be
converted into cash, securities or other property, other than a merger of the
Company in which the holders of the Company’s voting stock immediately prior to
the merger have the same proportionate ownership of voting stock of the
surviving corporation immediately after the merger, or (B) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, the assets of the Company; or
(ii) the stockholders of the Company shall approve any plan or proposal for
liquidation or dissolution of the Company; or (iii) any person (as such term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)), other than a person who on the date hereof is the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of
10% or more of the Company’s outstanding voting stock, shall become the
beneficial owner of 35% or more of the Company’s then outstanding voting stock;
or (iv) during any period of two consecutive years, individuals who at the
beginning of such period constitute the entire Board of Directors of the Company
(the “Board”) shall cease for any reason to constitute a majority thereof unless
the election, or the nomination for election by the Company’s stockholders, of
each new director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
(c) “Good Reason” means any of the following events that occur, after expiration
of any remedy or cure period, (1) a material diminution of the Executive’s
duties and responsibilities that result in a material adverse effect on the
Executive’s status and authority, (2) a change in the principal location of the
Executive’s employment to a location more than fifty (50) miles outside of New
York City, except for travel reasonably required as part of such employment,
(3) failure to timely pay the Executive any salary or bonus when due or (4) any
reduction in (i) the Executive’s annual rate of salary from the highest annual
rate of salary in effect during the one-year period prior to the date of the
Change of Control or (ii) the amount of annual bonus paid to the Executive after
the date of the Change in Control in light of the results of operations of the
Company for that year compared to the bonus paid for the most recent fiscal year
prior to the date of the Change of Control in light of the results of operations
of the Company for that year. Notwithstanding the foregoing, in order to
terminate for “Good Reason,” the Executive must specify in writing to the
Company (or the successor or acquiring company) the nature of the act or
omission that the Executive deems to constitute Good Reason and provide the
Company (or the successor or acquiring company) 30 days after receipt of such
notice to review and, if required, correct the situation (and thus prevent the
Executive’s termination for Good Reason). Notice of termination for Good Reason
must be provided, if at all, within 90 days after the occurrence of the event or
condition giving rise to such termination.
2. Release of Claims; Timing of Payments. Notwithstanding anything herein to the
contrary, Executive’s right to receive and retain any severance payments or
benefits under this Agreement shall be conditioned upon receipt by the Company,
within the applicable 60-day time period described below, of a release
substantially in the form annexed hereto as Exhibit A, which is no longer
subject to revocation; it being understood that such release will not affect
Executive’s right to indemnity or vested benefits. For the purpose of the
preceding sentence, the applicable period shall be 60 days after the date of
Executive’s termination of employment, or, if the event giving rise to severance
payments and benefits is a Change in Control occurring after Executive’s
termination of employment, 60 days after the date of the Change in Control. If
the Executive fails to timely satisfy the foregoing release condition, then the
Executive will not be entitled to receive or retain any severance payments or
benefits under this Agreement. Subject to the provisions hereof, including,
without limitation, satisfaction of the release condition imposed pursuant to
this section and any delayed payment requirement that may be imposed by
Section 11 below, severance payments required to be made under this Agreement
shall be made or begin at the end of the applicable 60-day time period described
above; and, on such payment commencement date, the Executive will be entitled to
receive a single sum make-up payment equal to the sum of the severance payments
the Executive would have received from the date of the event giving rise to such
severance payments and the delayed start date for such payments.

 

- 3 -

--------------------------------------------------------------------------------

 

3. Golden Parachute Tax Limitation. If the Executive is entitled to receive
payments and benefits under this Agreement and if, when combined with the
payments and benefits the Executive is entitled to receive under any other plan,
program or arrangement of the Company, the Executive would be subject to excise
tax under Section 4999 of the Code or the Company would be denied a deduction
under Section 280G of the Code, then the severance amounts otherwise payable to
the Executive under this Agreement will be reduced by the minimum amount
necessary to ensure that the Executive will not be subject to such excise tax
and the Company will not be denied any such deduction.
4. Effect of Other Agreements. Notwithstanding the provisions hereof, if any
termination or severance payments or benefits are made or provided to the
Executive by the Company pursuant to a written employment or other agreement
between the Executive and the Company, the payments and benefits required to be
provided under this Agreement shall be reduced by the amount of the comparable
payments and benefits payable under such other agreement(s) in order to avoid
duplication.
5. No Duty to Mitigate. Except as otherwise specifically provided herein, the
Executive’s entitlement to payments and benefits hereunder is not subject to
mitigation or a duty to mitigate by the Executive.
6. Successors and Assigns. The Company shall require any successor or assignee,
whether direct or indirect, by purchase, merger, consolidation or otherwise, to
all or substantially all the business or assets of the Company and its
subsidiaries taken as a whole, expressly and unconditionally to assume and agree
to perform or cause to be performed the Company’s obligations under this
Agreement. In any such event, the term “Company,” as used herein shall include
any such successor or assignee.
7. Legal Fees to Enforce Rights after a Change in Control. If, following a
Change in Control, the Company fails to comply with any of its obligations under
this Agreement or the Company takes any action to declare this Agreement void or
unenforceable or institutes any litigation or other legal action designed to
deny, diminish or to recover from the Executive the payments and benefits
intended to be provided, then the Executive shall be entitled to select and
retain counsel at the expense of the Company to represent the Executive in
connection with the good faith initiation or defense of any litigation or other
legal action, whether by or against the Company or any director, officer,
stockholder or other person affiliated with the Company or any successor thereto
in any jurisdiction.
8. Not a Contract of Employment. This Agreement shall not be deemed to
constitute a contract of employment between the Executive and the Company.
Nothing contained herein shall be deemed to give the Executive a right to be
retained in the employ or other service of the Company or to interfere with the
right of the Company to terminate the Executive’s employment at any time.

 

- 4 -

--------------------------------------------------------------------------------

 

9. Governing Law; Venue. This Agreement shall be governed by the laws of the
State of New York, excluding its conflict of law rules. Any suit with respect to
this Agreement will be brought in the federal or state courts in the districts,
which include New York, New York, and the Executive hereby agrees to submit to
the personal jurisdiction and venue thereof.
10. Counterparts. This Agreement may be executed in separate counterparts, each
of which will be an original and all of which taken together shall constitute
one and the same agreement, and any party hereto may execute this Agreement by
signing any such counterpart.
11. Tax Withholding; Section 409A Compliance. The payment of any amount pursuant
to this Agreement shall be subject to all applicable tax withholding. For the
purposes of this Agreement, a “termination of employment” or words of like
import shall mean a “separation from service” within the meaning of Section 409A
of the Internal Revenue Code of 1986 and the regulations issued thereunder.
Notwithstanding any provision to the contrary in this Agreement, any payment
otherwise required to be made to the Executive on account of the termination of
the Executive’s employment, to the extent such payment is properly treated as
deferred compensation subject to the Section 409A of the Internal Revenue Code
of 1986 and the regulations and other applicable guidance issued by the Internal
Revenue Service thereunder, and only if the Executive is treated as a “specified
employee” within the meaning of Section 409A of the Code at the time of such
termination of employment, shall not be made until the first business day after
the expiration of six months from the date of the Executive’s termination of
employment or, if earlier, the date of Executive’s death. On the payment date,
as so delayed, there shall be paid to the Executive (or the Executive’s estate,
as the case may be) in a single cash payment an amount equal to aggregate amount
of the payments delayed pursuant to the preceding sentence. It is intended that
any amounts payable under this Agreement and Company’s and Executive’s exercise
of any authority or discretion hereunder shall comply with, and avoid the
imputation of any tax, penalty or interest under Section 409A of the Code. This
Agreement shall be construed and interpreted in a manner that is consistent with
that intent. Notwithstanding the foregoing, Executive shall be solely
responsible, and the Company shall have no liability, for any taxes,
acceleration of taxes, interest or penalties arising under Section 409A of the
Code.
12. Entire Agreement; Amendment. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes any prior and/or contemporaneous understandings,
agreements or representations, written or oral, relating to the subject matter
hereof. This Agreement may be amended only by a written instrument signed by
both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

            G-III APPAREL GROUP, LTD.
      By:                     Executive     

 

- 5 -

--------------------------------------------------------------------------------

 

EXHIBIT A
RELEASE AGREEMENT
This Release Agreement (“Agreement”) is made as of the  _____  day of  _____ 
2011, by and between [Executive] (“Executive”) and G-III Apparel Group, Ltd.
(the “Company”).
1. This will confirm that a severance event as described in Section 1.1 of the
Executive Transition Agreement between Executive and the Company, dated February
 _____, 2011 (the “Executive Transition Agreement”), has occurred. In accordance
with paragraph 2 of the Executive Transition Agreement, the Executive’s right to
receive and retain any severance payments or benefits under the Executive
Transition Agreement is conditioned upon the timely receipt by the Company of a
general release by the Executive in favor of Company, its affiliates and their
officers, directors and employees, which is no longer subject to revocation.
Accordingly, in consideration of the severance payments and benefits under the
Executive Transition Agreement and other good and valuable consideration,
Executive for himself and for the executors and administrators of his estate,
his heirs, successors and assigns, hereby covenants not to commence an action or
proceeding against, and releases and forever discharges, the Company and its,
parent, subsidiaries, affiliates and their officers, directors, employees, and
agents, and the respective executors, administrators, heirs, successors and
assigns of the foregoing, from any and all claims and actions relating to
Executive’s employment or the termination of Executive’s employment with the
Company, including but not limited to actions arising under the New York State
Executive Law, Title VII of the 1964 Civil Rights Act, the Age Discrimination in
Employment Act (“ADEA”), the Older Workers Benefit Protection Act, the Americans
With Disabilities Act, and the Administrative Code of The City of New York, and
all other causes of action, suits, sums of money, debts, dues, accounts,
reckonings, bonds, bills, covenants, contracts, controversies, agreements,
promises, demands or damages of any nature whatsoever or by reason of any
matter, cause or thing regardless of whether known or unknown at present,
including tort or negligence claims, against the Company, its subsidiaries,
affiliates, officers, directors, employees, and agents, which Executive ever
had, now has or hereafter can, shall or may have for, upon, or by reason of, any
matter, cause or thing whatsoever from the beginning of the world to the date
hereof. The parties also agree that this Agreement does not either affect the
rights and responsibilities of the Equal Employment Opportunity Commission to
enforce the Age Discrimination in Employment Act, or justify interfering with
the protected right of an employee to file a charge or participate in an
investigation or proceeding conducted by the Equal Employment Opportunity
Commission under the Age Discrimination in Employment Act. In the event the
Equal Employment Opportunity Commission commences a proceeding against the
Company in which Executive is a named party, Executive agrees to waive and
forego any monetary claims which may be alleged by the Equal Employment
Opportunity Commission to be owed to Executive. This release does not affect the
Executive’s right, if any, to receive any vested payments or benefits accrued
and payable under and in accordance with the Executive Transition Plan or any
employee benefit plan in which Executive is a participant, nor shall this
release affect any right the Executive may have to indemnification by the
Company. For the purposes hereof, the term “Company” shall include any direct or
indirect successor to the Company. Executive does not waive or release any
claims which arise after the date Executive executes this Agreement.

 

--------------------------------------------------------------------------------

 

EXHIBIT A
2. Executive has been advised to consult with an attorney prior to executing
this Agreement. By executing this Agreement, Executive acknowledges that (a) he
has been provided with an opportunity to consult with an attorney or other
advisor of his choice regarding the terms of this Agreement, (b) this is a final
offer and Executive has been given [21 or 45, as applicable] days in which to
consider whether he wishes to enter into this Agreement, (c) Executive has
elected to enter into this Agreement knowingly and voluntarily and (d) if he
does so within fewer than [21]/[45] days from receipt of the final document he
has knowingly and voluntarily waived the remaining time. This Agreement shall be
fully effective and binding upon all parties hereto immediately upon execution
of this Agreement except as to rights or claims arising under the ADEA, in which
case Executive has 7 days following execution of this Agreement to change his
mind (the “Revocation Period”).

            Executive

G-III APPAREL GROUP, LTD.
      By:           Title: