Exhibit 10.1

 

LIZ CLAIBORNE, INC.
EXECUTIVE SEVERANCE AGREEMENT

 

This Executive Severance Agreement (this “Agreement”), effective as of this
     day of       2012 (the “Effective Date”), is by and between Liz
Claiborne, Inc. (“Liz”), a Delaware corporation, and      (the “Executive”).

 

WHEREAS, the Compensation Committee of the Board of Directors of Liz (the
“Compensation Committee”) has determined that appropriate steps should be taken
to reinforce and encourage the continued attention and dedication of the
Executive to his or her assigned duties in the face of possible distraction of
the Executive by virtue of the personal uncertainties and risks created by the
possibility of termination of, or adverse change to, his or her employment;

 

WHEREAS, the Compensation Committee believes it is in Liz’s best interests to
ensure that the Executive will refrain from certain competitive activities with
Liz and its affiliates as described herein; and

 

NOW, THEREFORE, to assure Liz it will have the continued undivided attention and
services of the Executive and the availability of his or her advice and counsel,
and to induce the Executive to remain in the employ of Liz hereinafter, for the
benefit of Liz, and for other good and valuable consideration, Liz and the
Executive agree as follows:

 

1.                                      Term of Agreement.

 

(a)                                  The term of this Agreement shall commence
immediately upon the Effective Date and end on December 31, 2013 (as extended
pursuant to the immediately following sentence, if applicable, the “Term”).  The
Term shall be automatically extended for additional one-year periods, unless Liz
delivers notice to the Executive on or prior to October 31st of the year in
which the expiration of the Term occurs of its intent not to extend the Term. 
The “Employment Period” means the earlier of the expiration of the Term or the
Executive’s termination of employment.

 

(b)                                 If a Change in Control occurs at any time
during the period in which this Agreement is effective, then, notwithstanding
any provision hereof to the contrary, this Agreement shall continue in effect
for (i) the remainder of the month in which the Change in Control occurred and
(ii) a term of twelve (12) months beyond the month in which such Change in
Control occurred; provided that if any obligations of Liz hereunder shall not
have been fully and finally discharged at the end of such twelve (12) month
period, this Agreement shall remain in effect until such obligations shall have
been finally discharged in full.

 

2.                                      Termination.

 

(a)                                  Cause.  The Executive’s employment may
terminate immediately, with or without Cause, at the election of Liz and upon
notice from Liz to the Executive.  As used herein, the term “Cause” means:

 

(i)                                     the Executive’s willful and intentional
repeated failure or refusal, continuing after notice that specifically
identifies the breach(es) complained of, to perform

 

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substantially his or her material duties, responsibilities and obligations
(other than a failure resulting from the Executive’s incapacity due to physical
or mental illness or other reasons beyond the control of the Executive), and
which failure or refusal results in demonstrable direct and material injury to
Liz;

 

(ii)                                  any willful or intentional act or failure
to act involving fraud, misrepresentation, theft, embezzlement, dishonesty or
moral turpitude (collectively, “Fraud”) which results in demonstrable direct and
material injury to Liz;

 

(iii)                               the Executive’s conviction of (or a plea of
nolo contendere to) an offense which is a felony in the jurisdiction involved or
which is a misdemeanor in the jurisdiction involved but which involves Fraud; or

 

(iv)                              the Executive’s material breach of a written
policy of Liz or the rules of any governmental or regulatory body applicable to
Liz.

 

For purposes of this Section 2, no act, or failure to act, on the Executive’s
part shall be deemed “willful” or “intentional” unless done, or omitted to be
done, by the Executive without reasonable belief that the Executive’s action or
omission was in the best interests of Liz.

 

(b)         Cause Determination.  The Executive’s termination for Cause will be
determined by the Compensation Committee based upon the recommendation of the
Chief Executive Officer and Chief Legal Officer of Liz.

 

(c)          Death; Disability.  The Executive’s employment with Liz terminates
upon the Executive’s death or, at Liz’s option, by written notice to the
Executive (or the Executive’s legal representative) upon the Executive’s
Disability.  As used herein the term “Disability” means any physical or mental
condition that would qualify the Executive for a disability benefit under the
long-term disability plan maintained by Liz, or, if there is no such plan, a
physical or mental condition that prevents the Executive from performing the
essential functions of the Executive’s position (with or without reasonable
accommodation) for a period of six (6) consecutive months.  A determination of
Disability will be made by a physician satisfactory to both the Executive and
the Liz; provided that, if the Executive and Liz cannot agree as to a physician,
then each will select a physician and these two together will select a third
physician, whose determination as to Disability will be binding on the Executive
and Liz.  The Executive, the Executive’s legal representative or any adult
member of the Executive’s immediate family shall have the right to present to
Liz and such physician such information and arguments on the Executive’s behalf
as the Executive or they deem appropriate, including the opinion of the
Executive’s personal physician.

 

(d)                                 Performance-Based Termination.  Liz may
terminate the Executive’s employment based on performance (“Performance-Based
Termination”).  To constitute a Performance-Based Termination, the Executive
must receive a written warning setting forth the performance deficiency and be
afforded the opportunity to cure performance for a period of 60 days following
the date of the written warning.  Following the 60-day cure period, if Liz
determines that the Executive’s performance has not improved, Liz shall notify
the Executive in writing of the Performance-Based Termination and the Executive
shall have the opportunity to

 

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appeal the Performance-Based Termination to the Board of Directors of Liz within
two (2) business days following the date of Liz’s notice of termination.  Any
determination by the Board shall be final and binding.

 

(e)                                  Change in Control.  For purposes of this
Agreement, a “Change in Control” of Liz shall be deemed to have occurred upon
the happening of any of the following events: (i) any “person,” including a
“group,” as such terms are defined in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended, and the rules promulgated thereunder, becomes
the beneficial owner, directly or indirectly, whether by purchase or acquisition
or agreement to act in concert or otherwise, of 35% or more of the outstanding
shares of common stock of Liz to an unaffiliated third party; (ii) the sale of
all or substantially all of the assets of Liz; or (iii) the election or
appointment during any 12-month period of a majority of the members of the Board
of Directors of Liz whose election or appointment is not endorsed by a majority
of the members of the Board prior to the date of the appointment or election.

 

3.                                      Severance.

 

(a)                                  Termination For Cause; Voluntary
Termination Without Good Reason.  In the event that the Executive’s employment
is terminated due to (i) a termination by Liz for Cause or (ii) the Executive’s
resignation without Good Reason (as defined herein), Liz shall pay to the
Executive an amount equal to the Executive’s accrued but unpaid base salary
through the date of termination, payable in accordance with Liz’s ordinary
payroll practices (“Accrued Salary”).

 

(b)                                 Termination Due to Death or Disability.  In
the event that the Executive’s employment is terminated due to the Executive’s
death or Disability:

 

(i)                                     Liz shall pay to the Executive an amount
equal to the Executive’s Accrued Salary; and

 

(ii)                                  the Executive shall be eligible for a
pro-rated bonus (“Pro-Rated Bonus”) in respect of Liz’s fiscal year during which
the termination occurs based on (x) Liz’s actual performance as determined
pursuant to the provisions of Liz’s relevant bonus plan and (y) a fraction, the
numerator of which is the number of whole months in the fiscal year prior to the
date on which the Executive’s employment terminates and the denominator of which
is twelve (12), payable at the time bonuses would otherwise be paid pursuant to
the applicable bonus plan (which shall be within the “short-term deferral”
period set forth in Section 409A of the Internal Revenue Code of 1986, as
amended, and the regulations and guidance promulgated thereunder (the “Code”)).

 

(c)                                  Performance-Based Termination. If a
Performance-Based Termination occurs then, subject to Section 3(g):

 

(i)                                     Liz shall pay to the Executive an amount
equal to the Executive’s Accrued Salary;

 

(ii)                                  Liz shall provide Benefits Continuation
for the Executive and the Executive’s family, as provided in Section 3(e) below;

 

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(iii)                               the Executive shall be eligible for a
Pro-Rated Bonus payable at the time bonuses would otherwise be paid pursuant to
the applicable bonus plan (which shall be within the “short-term deferral”
period set forth in Section 409A of the Code); and

 

(iv)                              Liz shall continue to pay to the Executive his
or her base salary at the then-current rate for a period of 26 weeks, payable in
accordance with Liz’s ordinary payroll practices, following the
Performance-Based Termination (“Initial Continuation Period”), less an amount
equal to the Executive’s portion of the premiums applicable to the Benefits
Continuation for such period.  Following the Initial Continuation Period, the
Executive shall receive up to an additional 26 weeks of base salary
continuation, payable in accordance with Liz’s ordinary payroll practices,
subject to the Executive’s failure to obtain Alternate Employment, provided he
or she uses Reasonable Efforts to obtain Alternate Employment. “Alternate
Employment” means (x) employment that provides the Executive with base salary at
a rate not less than 75% of the Executive’s base salary rate at the time of
termination or (y) a consulting arrangement that continues for five
(5) consecutive weeks and exceeds 30 hours per week.  “Reasonable Efforts”
means, among other things, that the Executive attends all counseling and/or
training sessions recommended by the designated outplacement service group,
maintains weekly contact with the outplacement service group and maintains
discussions with the outplacement service group regarding all offers of
alternate employment made to the Executive.

 

The payments and benefits set forth in Section 3(c)(ii) and 3(c)(iv) are
contingent on the Executive’s execution, delivery and non-revocation of the
Release as provided for in Section 3(g).  Payments pursuant to
Section 3(c)(iv) shall commence on the 60th day following the Executive’s date
of termination of employment and (B) within 15 business days following this
payment commencement date, salary continuation payments relating to the first 60
days shall be paid in a lump sum.  Notwithstanding the foregoing, if, and only
to the extent required to avoid the imputation of any tax, penalty or interest
pursuant to Section 409A of the Code, the aggregate payments pursuant to
Section 3(c)(iv) shall be reduced to the amount that is one dollar less than the
maximum amount payable pursuant to a “separation pay plan” for separation pay
due to involuntary separation from service as set forth in Section 409A of the
Code and the regulations promulgated thereunder (the “Performance Severance
Payment Limit”).  Liz shall, in its sole discretion, determine if the amounts
payable pursuant to Section 3(c)(iv) are in excess of the Performance Severance
Payment Limit.  In determining the aggregate payments pursuant to
Section 3(c)(iv) subject to reduction, such amount shall be determined prior to
giving effect to any deductions relating to the Executive’s portion of the
premiums applicable to the Benefits Continuation.  The Executive shall have no
rights to receive any payments in excess of the Performance Severance Payment
Limit.

 

(d)                                 Termination Without Cause; Voluntary
Termination for Good Reason; Termination in Connection with a Change in
Control.  Subject to Section 3(g), in the event that the Executive’s employment
is terminated (1) by Liz other than for Cause and other than upon the
Executive’s death or Disability, or a Performance-Based Termination; (2) by the
Executive for Good Reason; or (3) by Liz (other than for Cause and other than
upon the Executive’s death, Disability or Performance-Based Termination) in
connection with a Change in Control or by the Executive for Good Reason in
connection with a Change in Control:

 

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(i)                                     Liz shall pay to the Executive an amount
equal to the Executive’s Accrued Salary;

 

(ii)                                  Liz shall provide Benefits Continuation
for the Executive and the Executive’s family, as provided in Section 3(e) below;

 

(iii)                               Liz shall pay to the Executive an amount
equal to two (2) times the Executive’s then current annual target bonus plus an
amount equal to two (2) times the Executive’s then-current annual base salary,
less an amount equal to the Executive’s portion of the premiums applicable to
the Benefits Continuation for 26 weeks.  For the avoidance of doubt, no amount
shall be paid pursuant to Section 3(d) in respect of the annual bonus for the
current year.

 

Payments pursuant to Section 3(d)(iii) shall be made in a single lump sum on the
60th day following the Executive’s date of termination of employment, subject to
the Executive’s execution, delivery and non-revocation of the Release as
provided for in Section 3(g).  For the purposes of this Agreement, “Good Reason”
shall mean the occurrence of one or more of the following events:  (1) The
Executive experiences a material diminution in duties or responsibilities,
without the Executive’s consent (provided that a change in reporting structure
shall not be deemed a diminution in duties or responsibilities); (2) Liz moves
its principal executive offices by more than 100 miles (provided that such move
increases the Executive’s commuting distance by more than 100 miles); (3) a
material reduction in the Executive’s base salary; or (4) a material breach by
Liz of any of its material obligations under any employment agreement between
the Executive and Liz then in effect; provided, however, that no event or
condition shall constitute Good Reason unless (x) the Executive gives Liz a
written notice of termination for Good Reason no fewer than 30 days prior to the
date of termination and not more than 90 days after the initial existence of the
condition giving rise to Good Reason, and (y) the grounds for termination (if
susceptible to correction) are not corrected by Liz within 30 days of its
receipt of such notice.

 

(e)                                  Benefits Continuation.  So long as the
Executive shall not have breached the Executive’s obligations to Liz under
Sections 4 and 5 hereof (and without limiting any other remedy available to
Liz), Liz shall provide the Executive and the Executive’s family with coverage
substantially identical to that provided to other senior executives of Liz in
its medical, dental, vision, and the Executive life insurance programs (subject
in the case of life insurance to insurability at standard rates) until the
earlier of (i) 26 weeks following the date of the Executive’s termination or
(ii) the date on which the Executive (or the Executive’s family in the case of
the Executive’s death) becomes eligible to participate in another group welfare
plan or program (“Benefits Continuation”).  Notwithstanding the forgoing,
nothing in this Section 3(e) shall prohibit Liz from making any modification to
its medical, dental, vision and Executive life insurance programs from time to
time.  The Executive shall continue to pay the employee portion of the Benefits
Continuation as in effect from time to time.  If this agreement to provide
Benefits Continuation raises any compliance issues or impositions of penalties
under any non-discrimination rules that have been issued or are issued in the
future pursuant to the Patient Protection and Affordable Care Act (PPACA), the
parties agree to modify this Agreement so that it complies with the terms of
those non-discrimination rules without impairing the economic benefit to the
Executive.

 

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(f)                                    General.  In the event that the
Executive’s employment with Liz is terminated for any reason, Liz’s payment of
the amounts or benefits provided for in this Section 3 (together with
reimbursement of the Executive’s reasonable and necessary out-of-pocket business
expenses incurred through such date in accordance with Liz’s standard policy in
effect at such time) shall constitute complete satisfaction of all obligations
of Liz to the Executive pursuant to this Agreement.  Upon any termination of
employment, the Executive shall cease to be an employee of Liz for all purposes
and except as otherwise expressly set forth in this Section 3 or Section 9 of
this Agreement, Liz shall have no obligation under this Agreement to provide the
Executive with any employee benefits or perquisites.  In particular, except as
set forth in Section 3(b)(ii) and 3(c)(iii), the Executive shall have no right
to receive a bonus for the year in which the Executive’s employment is
terminated for any reason.

 

(g)                                 Release Requirement.  Liz expressly
conditions its provision of all payments and benefits due to the Executive
pursuant to this Section 3 on receipt from the Executive of a full general
release of all claims against Liz, its affiliates, and each of their respective
officers, directors, insured’s and affiliates, in a form and manner determined
by Liz in its sole discretion (“Release”), (which must be signed by the
Executive within 21 or 45 days of receipt of the Release, as may be required by
law) and such release becoming effective and irrevocable (provided Executive has
not revoked the Release pursuant to and within the statutory revocation period,
if required) in its entirety.

 

(h)                                 Consideration.  Payments made pursuant to
Sections 3(c), 3(d) and 3(e) are made in consideration of the Executive’s
signing a release pursuant to Section 3(g) and compliance with the covenants set
forth in Sections 4 and 5.

 

(i)                                     Sole Remedy.  The Executive’s rights set
out in this Agreement shall constitute the Executive’s sole and exclusive rights
and remedies as a result of the Executive’s actual or constructive termination
of employment other than rights to vested benefits under Liz’s tax qualified and
non-qualified retirement plans or additional vesting of equity awards as
provided for under the terms of those equity awards, or as otherwise required by
applicable law, and the Executive hereby waives any such other claims against
Liz as a result of the Executive’s termination of employment.

 

(j)                                     Compliance with Section 409A.  This
Agreement is intended to satisfy the requirements of Section 409A of the Code
with respect to amounts subject thereto and shall be interpreted and construed
and shall be performed by the parties consistent with such intent, and Liz shall
not make or provide any payment or benefits if such payment or provision of such
benefits would, as a result, be subject to tax under Section 409A of the Code. 
Payments and benefits provided under this Agreement are intended to be exempt
from or qualify as an exception to Section 409A of the Code, for example by
constituting either a “short-term deferral” or pay pursuant to a “separation pay
plan,” in each case, in accordance with Section 409A of the Code and the
regulations promulgated thereunder, and all provisions of the Agreement shall be
construed and interpreted in a manner consistent with such intention and any
ambiguities herein will be interpreted to give effect to such intention.  If, in
the good faith judgment of Liz, any provision of this Agreement could cause the
Executive to be subject to adverse or unintended tax consequences under
Section 409A of the Code, such provision shall be modified by Liz in its sole
discretion to maintain, to the maximum extent practicable, the original intent
of the applicable provision

 

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without violating the requirements of Section 409A of the Code.  Each payment
made pursuant to this Agreement shall be deemed a separate payment for purposes
of Section 409A of the Code.  Except as expressly provided otherwise herein, no
reimbursement payable to the Executive pursuant to any provisions of this
Agreement or pursuant to any plan or arrangement of Liz covered by this
Agreement shall be paid later than the last day of the calendar year following
the calendar year in which the related expense was incurred, and no such
reimbursement during any calendar year shall affect the amounts eligible for
reimbursement in any other calendar year, except, in each case, to the extent
that the right to reimbursement does not provide for a “deferral of
compensation” within the meaning of Section 409A of the Code.

 

(k)                                  Additional Tax Considerations.  In the
event that (but for this Section 3(k)) any payment or benefit received or to be
received by the Executive pursuant to this Agreement or any other plan or
arrangement with Liz (each, a “Payment”) would constitute an “excess parachute
payment” within the meaning of Section 280G(b)(1) of the Code, or would
otherwise be subject to the excise tax imposed under Section 409 of the Code, or
any similar federal or state law, Liz shall reduce the aggregate amount of such
Payments such that the present value thereof (as determined under the Code and
the applicable regulations) is equal to 2.99 times the Executive’s “base amount”
as defined in Section 280G(b)(3) of the Code.  The determinations to be made
with respect to this Section 3(k) shall be made by a certified public accounting
firm designated by Liz.  Unless the Executive shall have given prior written
notice to Liz to effectuate any such reduction if a reduction is required, any
such notice consistent with the requirements of Section 409A of the Code to
avoid the imputation of any tax, penalty or interest thereunder, Liz shall
reduce or eliminate Payments by first reducing or eliminating any cash severance
benefits (with the payments to be made furthest in the future being reduced
first), then by reducing or eliminating any other remaining Payments.  The
preceding provisions of this Section 3(k) shall take precedence over the
provisions of any other plan, arrangement or agreement governing the Executive’s
rights and entitlements to any benefits or compensation.

 

4.                                      Confidentiality.

 

(a)                                  Liz owns and has developed and compiled,
and will own, develop and compile, certain proprietary techniques and
confidential information which have great value to its business (referred to in
this Agreement, collectively, as “Confidential Information”).  Confidential
Information includes not only information disclosed by Liz and its affiliates,
but also information developed or learned by the Executive during the course or
as a result of employment hereunder, which information the Executive
acknowledges is and shall be the sole and exclusive property of Liz. 
Confidential Information includes all proprietary information that has or could
have commercial value or other utility in the business in which Liz is engaged
or contemplates engaging, and all proprietary information of which the
unauthorized disclosure could be detrimental to the interests of Liz, whether or
not such information is specifically labeled as Confidential Information by
Liz.  By way of example and without limitation, Confidential Information
includes any and all information developed, obtained or owned by Liz concerning
trade secrets, techniques, know-how (including designs, plans, procedures,
merchandising know-how, processes and research records), software, computer
programs, innovations, discoveries, improvements, research, development, test
results, reports, specifications, data, formats, marketing data and plans,
business plans, strategies, forecasts, unpublished financial information,
orders, agreements and other forms of documents, price and cost information,

 

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merchandising opportunities, expansion plans, designs, store plans, budgets,
projections, customer, supplier and subcontractor identities, characteristics
and agreements, and salary, staffing and employment information. Notwithstanding
the foregoing, Confidential Information shall not in any event include
information which (i) was generally known or generally available to the public
prior to its disclosure to the Executive; (ii) becomes generally known or
generally available to the public subsequent to disclosure to the Executive
through no wrongful act of any person; or (iii) which the Executive is required
to disclose by applicable law, regulation, or legal process (provided that,
unless prohibited by law, the Executive provides Liz with prior notice of the
contemplated disclosure and reasonably cooperates with Liz, at Liz’s expense in
seeking a protective order or other appropriate protection of such information).

 

(b)           The Executive acknowledges and agrees that in the performance of
the Executive’s duties hereunder Liz will from time to time disclose to the
Executive and entrust the Executive with Confidential Information.  The
Executive also acknowledges and agrees that the unauthorized disclosure of
Confidential Information, among other things, may be detrimental to Liz’s
interests, an invasion of privacy and an improper disclosure of trade secrets. 
The Executive agrees that the Executive shall not, directly or indirectly, use,
make available, sell, disclose or otherwise communicate to any corporation,
partnership, individual or other third party, other than in the course of the
Executive’s assigned duties and for the benefit of Liz, any Confidential
Information, either during the Employment Period or thereafter.

 

(c)           In the event the Executive’s employment with Liz ceases for any
reason, the Executive will not remove from Liz’s ‘s premises without its prior
written consent any records, files, drawings, documents, equipment, materials or
writings received from, created for or belonging to Liz, including those which
relate to or contain Confidential Information, or any copies thereof.  Upon
request or when the Executive’s employment with Liz terminates, the Executive
will immediately deliver the same to Liz.

 

(d)           During the Employment Period, the Executive will disclose to Liz
all designs, inventions and business strategies or plans developed by the
Executive during such period which relate directly or indirectly to the business
of Liz, including without limitation any process, operation, product or
improvement.  The Executive agrees that all of the foregoing are and will be the
sole and exclusive property of Liz and that the Executive will at Liz’s request
and cost do whatever is necessary to secure the rights thereto, by patent,
copyright or otherwise, to Liz.

 

(e)           The Executive and Liz agree that the Executive shall not disclose
to Liz, or use for Liz’s benefit, any information which may constitute trade
secrets or confidential information of third parties, to the extent the
Executive has any such secrets or information.

 

(f)            Executive agrees not to disclose any information regarding the
facts leading up to or the existence or substance of this Agreement, except to
Executive’s spouse, domestic or civil union partner, tax advisor, and/or an
attorney with whom Executive chooses to consult regarding Executive’s
consideration of this Agreement, or as otherwise required by law.

 

(g)           The provisions of this Section 4, unless otherwise noted, shall
survive the termination of this Agreement and the expiration of the Employment
Period.

 

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5.             Restrictive Covenants.

 

(a)           The Executive acknowledges and agrees (i) that the services to be
rendered by the Executive for Liz are of a special, unique, extraordinary and
personal character; (ii) that the Executive has and will continue to develop a
personal acquaintance and relationship with one or more of Liz’s customers,
employees, suppliers and independent contractors, which may constitute Liz’s
primary or only contact with such customers, employees, suppliers and
independent contractors, and (iii) that the Executive will be uniquely
identified by customers, employees, suppliers, independent contractors and
retail consumers with Liz products. Consequently, the Executive agrees that it
is fair, reasonable and necessary for the protection of the business,
operations, assets and reputation of Liz and that the Executive makes the
covenants contained in this Section 5.

 

(b)           The Executive agrees that, during the Employment Period and, for a
period of 18 months thereafter (“Restricted Period”), the Executive 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 5(b) shall prevent the Executive
from owning less than 2% of the voting stock of a publicly held corporation for
investment purposes.  For purposes of this Section 5(b), the term “Competing
Business” shall mean any business entity that engages in a competing business
with Liz, including, without limitation, any of the entities set forth on
Exhibit A.

 

(c)           The Executive agrees that, during the Restricted Period, the
Executive shall not, directly or indirectly:

 

(i)            persuade or seek to persuade any customer of Liz to cease to do
business or to reduce the amount of business which any customer has customarily
done or contemplates doing with Liz, whether or not the relationship between Liz
and such customer was originally established in whole or in part through the
Executive’s efforts;

 

(ii)           seek to employ or engage, or assist anyone else to seek to employ
or engage, any person who at any time during the year preceding the termination
of the Executive’s employment hereunder was in the employ of Liz or any of its
affiliates, or was an independent contractor providing material manufacturing,
marketing, sales, financial or management consulting services in connection with
the business of Liz or any of its affiliates and with whom the Executive had
regular contact; or

 

(iii)          interfere in any manner in the relationship of Liz or any of its
affiliates with any of its suppliers or independent contractors, whether or not
the relationship between Liz and the applicable affiliate and such supplier or
independent contractor was originally established in whole or in part by the
Executive’s efforts.

 

As used in this Section 5, the terms “customer” and “supplier” shall mean and
include any individual, proprietorship, partnership, corporation, joint venture,
trust or any other form of business entity which is then a customer or supplier,
as the case may be, of Liz or which was such

 

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a customer or supplier at any time during the one-year period immediately
preceding the date of termination of employment.

 

(d)           The Executive agrees that, during the Restricted Period, the
Executive will take no action which is intended, or would reasonably be
expected, to harm Liz or its reputation or which would reasonably be expected to
lead to unwanted or unfavorable publicity to Liz.

 

(e)           The Executive agrees not to publicly or privately make or publish
any statement (oral or written) that would disparage, criticize or defame Liz or
its affiliates or their executives or directors, and the Executive will do his
or her best to ensure that the Executive’s family members, agents or
representatives also do not publicly or privately make or publish any statement
(oral or written) that would disparage, criticize or defame Liz or its
affiliates or their executives or directors.

 

(f)            The provisions of this Section 5 shall survive the termination of
this Agreement and the expiration of the Employment Period.

 

6.             Remedies

 

(a)           The Executive acknowledges and agrees that the remedy at law
available to Liz for breach of any of the Executive’s obligations under this
Agreement (including without limitation Sections 4 or 5) may be inadequate and
that damages flowing from such breach may not be readily susceptible to
measurement in monetary terms.  Accordingly, the Executive acknowledges,
consents and agrees that in addition to any other rights or remedies that Liz
may have at law or in equity or as may otherwise be set forth in this Agreement,
if the Executive violates any of the provisions of this Agreement (including,
without limitation Sections 4 or 5), Liz shall be entitled to a decree
specifically enforcing such provisions, and shall be entitled to a temporary
restraining order or a preliminary or permanent injunction, restraining the
Executive from committing or continuing any such violation, without the
necessity of proving actual damages, posting any bond or other security. Such
injunctive relief in any court shall be available to Liz, in lieu of, or prior
to or pending determination in, any arbitration proceeding pursuant to
Section 9(d).

 

(b)           It is agreed that in the event of a breach of this Agreement
(including, without limitation, Sections 4 or 5), the Executive shall repay to
Liz the amount of any payments made pursuant to Section 3 other than the Accrued
Salary.  This Section 6(b) is in addition to any damages or remedies to which
the Executive is entitled to under law or equity, except that any damages award
will be reduced by the amount the Executive repaid pursuant to this
Section 6(b).

 

(c)           To the extent required under applicable laws rules and
regulations, Liz will be entitled to recoup, and the Executive will be required
to repay, any payments or benefits pursuant to this Agreement.

 

7.             Withholding.  The parties understand and agree that all payments
to be made by Liz pursuant to this Agreement shall be subject to all applicable
tax and other withholding obligations of Liz.

 

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8.             Notices.  All notices required or permitted hereunder will be
given in writing by personal delivery; by confirmed facsimile transmission; by
express delivery via any reputable express courier service; or by registered or
certified mail, return receipt requested, postage prepaid.  Any notice to Liz
shall be addressed to the Chief Executive Officer of Liz Claiborne, Inc., 1441
Broadway, New York, New York with a copy to the Chief Legal Officer, Liz
Claiborne, Inc., 5901 West Side Avenue, North Bergen, NJ 07047  or at such other
address as Liz may hereafter designate to the Executive by notice as provided in
this Section 8.  Any notice to be given to the Executive shall be addressed to
the Executive’s home address of record, or at such other address as the
Executive may hereafter designate to Liz by notice as provided herein.  Notices
which are delivered personally, by confirmed facsimile transmission, or by
courier as aforesaid, will be effective on the date of delivery.  Notices
delivered by mail will be deemed effectively given upon the fifth calendar day
subsequent to the postmark date thereof.

 

9.             Miscellaneous.

 

(a)           The failure of either party at any time to require performance by
the other party of any provision hereunder will in no way affect the right of
that party thereafter to enforce the same, nor will it affect any other party’s
right to enforce the same, or to enforce any of the other provisions in this
Agreement; nor will the waiver by either party of the breach of any provision
hereof be taken or held to be a waiver of any prior or subsequent breach of such
provision or as a waiver of the provision itself.

 

(b)           Each of the covenants and agreements set forth in this Agreement
are separate and independent covenants, each of which has been separately
bargained for and the parties hereto intend that the provisions of each such
covenant shall be enforced to the fullest extent permissible.  Should the whole
or any part or provision of any such separate covenant be held or declared
invalid, such invalidity shall not in any way affect the validity of any other
such covenant or of any part or provision of the same covenant not also held or
declared invalid.  If any covenant shall be found to be invalid but would be
valid if some part thereof were deleted or the period or area of application
reduced, then such covenant shall apply with such minimum modification as may be
necessary to make it valid and effective.

 

(c)           The Executive acknowledges and agrees that his or her work with
Liz directly affects Liz’s operations in the State of New York and, therefore,
the parties agree that all provisions in this Agreement will be governed,
construed and enforced in accordance with the laws of the State of New York and
without regard to conflict of law provisions.

 

(d)           Any controversy arising out of or relating to this Agreement or
the breach hereof shall be settled by JAMS arbitration in the City of New York
in accordance with the rules then governing.  Judgment upon the arbitration
award rendered may be entered in any court having jurisdiction thereof, except
that in the event of any controversy relating to any violation or alleged
violation of any provision of Sections 4 or 5 hereof, Liz in its sole discretion
shall be entitled to seek injunctive relief from a court of competent
jurisdiction without any requirement to first seek arbitration.  The parties
hereto agree that any arbitral award may be enforced against the parties to an
arbitration proceeding or their assets wherever they may be found.  In the event
that (i) the Executive makes a claim against Liz under this Agreement; (ii) Liz
disputes such claim, and (iii) the Executive prevails with respect to such
disputed claim, then Liz shall reimburse the Executive

 

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for the Executive’s reasonable costs and expenses (including reasonable attorney
fees) incurred by the Executive in pursuing such disputed claim.

 

(e)           The parties agree (subject to Sections 9(c) and 9(d)) to the
exclusive jurisdiction of the federal and state courts in the County of New
York, State of New York for any disputes arising out of this Agreement or the
Executive’s employment, and agree to dismiss any claim brought in any other
forum, with the party who filed a claim in such other forum to be responsible
for all costs associated with such dismissal.

 

(f)            This Agreement sets forth the entire agreement by and between
Liz, Liz and the Executive with respect to the subject matter hereof.  For
purposes of clarity, any Executive Severance Agreement previously entered into
between the Executive and Liz is superseded in its entirety and is of no further
force or effect after the Effective Date.

 

(g)           Notwithstanding anything to the contrary herein, in the event that
the Executive’s employment is terminated as a result of a sale pursuant to which
the assets of Liz or any of its affiliates is sold (which sale may or may not
constitute a Change in Control as such term is defined herein) and the Executive
receives a Comparable Job Offer (as defined below) with or by the purchaser of
such assets, or an affiliate of such purchaser, such termination shall not be
considered a termination under this Agreement and the Executive shall not be
entitled to any benefits pursuant to Section 3 of this Agreement as a result
thereof.  For purposes of this Agreement, a “Comparable Job Offer” shall mean an
offer of employment (that need not be in writing) with the purchaser of such
assets (or an affiliate thereof) that sets forth the following terms of
employment:  (i) a position that is the same or substantially similar to the
Executive’s position immediately prior to the consummation of such sale (the
“Closing Date”) (it being understood that whether a position is with an entity
whose stock is not publicly traded, shall not in and of itself preclude an offer
from being a Comparable Job Offer); (ii) an annual base salary, that is not
materially less favorable than the Executive’s base salary as in effect
immediately prior to the Closing Date; and (iii) is at the same work location
as, or a work location not more than one hundred (100) miles from, the
Executive’s work location immediately prior to the Closing Date (provided that
such move increases the Executive’s commuting distance by more than 100 miles).
The determination of whether the Executive has received a Comparable Job Offer
shall be reasonably determined in good faith by Liz and any determination so
made shall be final and binding upon the Executive.

 

(h)           The Section headings contained herein are for purposes of
convenience only and are not intended to define or list the contents of the
Sections.

 

(i)            The provisions of this Agreement which by their terms call for
performance subsequent to termination of the Executive’s employment, or
termination of this Agreement, shall so survive such termination.

 

(j)            Except as set forth in Section 3, the Executive shall not be
required to mitigate, by seeking employment or otherwise, the amount of any
payment or benefit provided for in this Agreement, including without limitation
any payment or benefit made or vested upon or as a result of the termination of
the Executive’s employment, nor will any compensation, income, or other benefit
from any source whatsoever create any mitigation, offset or reduction against
any

 

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such payment or benefit.

 

(k)           The Executive and Liz each hereby acknowledges and agrees that the
provisions of this Agreement are not intended to create any contractual
obligations with respect to the Executive’s employment by Liz.  The Executive
and Liz each acknowledges and agrees the Executive’s employment by Liz continues
to be “at-will” and either Executive or Liz may terminate the employment
relationship at any time for any reason with or without Cause or notice.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered as of the day and year first above set forth.

 

 

 

 

LIZ CLAIBORNE, INC.

 

 

 

 

 

 

Date:

 

 

By:

 

 

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

Date:

 

 

By:

 

 

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