Exhibit 10.1

 
RETIREMENT AGREEMENT
 
This Retirement Agreement (this “Agreement”) by and between The Warnaco Group,
Inc., a Delaware corporation (together with its successors and assigns, the
“Company”), and Frank Tworecke (the “Executive”), is dated as of April 25, 2012.
 
WHEREAS, the Company and the Executive are party to an employment agreement
dated as of April 16, 2004, as amended (the “Employment Agreement”) (all
capitalized terms not defined herein shall have the meanings ascribed to them in
the Employment Agreement);
 
WHEREAS, the Executive and the Company have agreed that the Executive will
retire in accordance with the terms of this Agreement;
 
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
 
1.           Responsibilities Through July 1, 2012.  As of the date of this
Agreement and through July 1, 2012, the Executive shall serve as the Company’s
Group President, Sportswear and the Executive agrees to devote his full business
time and attention to the satisfactory performance of such position.
 
2.           Resignation as Executive Officer on July 1, 2012.  Effective as of
July 1, 2012 (the “Resignation Date”), the Executive shall resign from serving
as the Group President, Sportswear and, except as provided in Section 3 of this
Agreement, from all other positions the Executive then holds as an officer and
employee of the Company or as an officer, employee or member of the board of
directors of any of the Company’s affiliates.  The Executive hereby agrees to
execute any and all documentation to effectuate such resignations upon request
by the Company, but he shall be treated for all purposes as having so resigned
from such positions on the Resignation Date, regardless of when or whether he
executes any such documentation.
 
3.           Transition Period.  During the period commencing on the Resignation
Date and continuing through December 31, 2012  (or such earlier date if the
Executive terminates his employment, his employment is terminated for Cause or
he dies, in each case prior to December 31, 2012) (the “Separation Date” and,
such continuation period, the “Transition Period”), the Executive shall serve as
a non-officer employee of the Company, providing strategic advice and working on
special projects pursuant to the direction of the Company’s Chief Executive
Officer.  In this capacity, the Executive shall provide no less than 20 percent
of the average level of services performed by him during the last three years of
his employment with the Company.  The Executive’s employment shall terminate
without any further action of either party on the Separation Date.
 
4.           Base Salary and Benefits.  Up through the Resignation Date and
during the Transition Period, the Executive shall continue to be paid his
current Base Salary in accordance with the Company’s normal payroll practices
(with each such payroll payment deemed to be a separate payment for purposes of
Section 409A) and receive the payments and entitlements set forth in paragraph 4
of the Employment Agreement.   Except as otherwise provided in Section 5 of this
Agreement, the Executive shall not be entitled to receive any other payments,
benefits or entitlements from the Company or any affiliate, including, without
limitation, any annual bonus
 

 
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or any additional long-term incentive and/or equity awards or Supplemental
Awards.  Through the Separation Date, the Executive shall remain subject to all
the Company’s policies and procedures.
 
5.           Additional Payments.  Provided that (x) the Executive’s employment
is not terminated for Cause or he does not resign his employment, in each case
prior to December 31, 2012, and (y) he does not die prior to the Resignation
Date, and subject to, and in consideration of, the Executive’s execution and
non-revocation of the release of claims against the Company attached hereto as
Exhibit A (the “Release”) within 21 days following the Separation Date and his
compliance with this Agreement, the Executive (or his estate, as applicable)
shall be entitled to the following:
 
(a)           a fully vested Supplemental Award equal to 13% of the sum of (i)
the actual base salary paid to the Executive for fiscal year 2012 and (ii)
notwithstanding anything to the contrary in paragraph 3(d) in the Employment
Agreement, the amount paid to the Executive pursuant to Section 5(d) below, with
such amount to be granted and paid in accordance with paragraph 3(d) of the
Employment Agreement, provided that (x) the grant date shall be April 1, 2013
and (y) if the payment date pursuant to paragraph 3(d) of the Employment
Agreement would result in a payment prior to April 1, 2013, the payment date for
this award shall be April 1, 2013;
 
(b)           a severance payment in the amount of $825,000, payable on March 1,
2013;
 
(c)           an additional severance payment in the amount of $870,000, payable
in 2013, but in all events no later than March 1, 2013;
 
(d)           an additional severance payment in the amount of $400,000, payable
in 2013, but in all events no later than March 1, 2013;
 
(e)           if the Executive renews the lease on his current New York City
apartment and provides the Company with such executed lease no later than August
1, 2012, an additional payment equal to the monthly rent due for such apartment
for January 2013 through the earliest of (i) June 2013, (ii) the date such lease
ends and (iii) the date the Executive no longer occupies such apartment, payable
in 2013, but in no event later than June 1, 2013; and
 
(f)            provided the Executive makes a timely election under COBRA,
continued participation for the Executive and his eligible dependents in the
Company’s medical and dental plans in which the Executive and his eligible
dependents were participating immediately prior to the Separation Date until the
earlier of (a) the 18th month anniversary of the Separation Date, or (b) the
date, or dates, the Executive receives equivalent coverage under the plans and
programs of a subsequent employer; provided that, at the Company’s election, the
Executive shall pay the full cost of such COBRA premiums and the Company shall
promptly reimburse the Executive for its portion of the premiums (as if the
Executive had continued in employment); and provided, further, that
 

 
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in no event shall there be any gross up provided by the Company for any tax
liabilities or otherwise.
 
For purposes of Section 409A, each payment under each clause of this Section 5
shall be deemed to be a “separate payment”.
 
6.           Outstanding Equity Awards.  The Executive’s outstanding equity
awards are  set forth on the schedule attached hereto as Schedule I and shall be
treated in accordance with the applicable plans and award agreements.
 
7.           Supplemental Awards.  The Executive’s outstanding Supplemental
Awards are fully vested and all Supplemental Awards, except for the award
payable pursuant to Section 5 above, shall be delivered or paid to the Executive
(or his estate) in accordance with paragraph 3(d) of the Employment Agreement.
 
8.           Non-Disparagement.  On and after the date hereof, the Executive and
the Company each agree that the mutual non-disparagement covenants contained in
paragraph 13 of the Employment Agreement shall be incorporated by reference in
this Agreement and shall remain in full force and effect.
 
9.           Confidentiality; Assignment of Rights; Return of Property.  On and
after the date hereof, the Executive shall continue to be subject to the
confidentiality provisions, the assignment of rights (for Rights made or
conceived during the Executive’s employment), and return of property provisions
set forth in paragraphs 14, 15 and 16 of the Employment Agreement, which
provisions are incorporated by reference in this Agreement and shall remain in
full force and effect.
 
10.         Non-Competition and Non-Solicitation.  The Executive acknowledges
that in the Executive’s capacity in management the Executive has had a great
deal of exposure and access to the trade secrets of the Company or its
affiliates and other confidential information of the Company and its
affiliates.  Therefore, to protect such trade secrets and such other
confidential information, in addition to the Executive’s obligations not to
engage in a “Competitive Activity” pursuant to the applicable award agreements
for any equity awards, the Executive agrees as follows:
 
(a)           During the Executive’s employment with the Company or any
affiliate and for 12 months following the Separation Date, the Executive shall
not, other than in the ordinary course of performing the Executive’s duties for
the Company prior to the Separation Date or as agreed by the Company in writing,
engage in a “Competitive Business,” directly or indirectly, as an individual,
partner, shareholder, director, officer, principal, agent, employee, trustee,
consultant, or in any relationship or capacity, in any geographic location in
which the Company or any of its affiliates is engaged in business.  The
Executive shall not be deemed to be in violation of this Section 10(a) by reason
of the fact that the Executive owns or acquires, solely as an investment, up to
two percent (2%) of the outstanding equity securities (measured by value) of any
entity.  “Competitive Business” shall mean a business primarily engaged in
apparel design or apparel wholesaling in competition with the Company or any of
its affiliates.  The Company agrees to consider in
 

 
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    good faith any written request by the Executive concerning whether an entity
or person qualifies as a “Competitive Business”.
 
(b)           During the Executive’s employment with the Company or any
Affiliate and for 18 months following the Separation Date, the Executive shall
not, other than in the ordinary course of the Company’s business prior to the
Resignation Date or with the Company’s prior written consent, directly or
indirectly, solicit or encourage any customer of the Company or any of its
affiliates to reduce or cease its business with the Company or any such
affiliate or otherwise interfere with the relationship of the Company or any
affiliate with its customers.
 
(c)           During the Executive’s employment with the Company or any
affiliate and for 18 months following the Separation Date, the Executive shall
not, other than in the ordinary course of the Company’s business prior to the
Resignation Date or with the Company’s prior written consent, directly or
indirectly, solicit any employee of the Company or any affiliate of the Company
to terminate his/her employment (excluding, only, his personal assistant) on his
behalf or on behalf of any other person or entity or hiring any key employee
(e.g., any management-level employee or any designer) of the Company or any
affiliate.
 
11.         Cooperation.  On and after the date hereof, the Executive and the
Company each agree that the provisions of the cooperation covenant contained in
paragraph 20 of the Employment Agreement shall be incorporated by reference in
this Agreement and shall remain in full force and effect.
 
12.         Injunctive and Other Relief.  The Executive expressly agrees and
acknowledges any breach or threatened breach of any of his obligations under
Section 8, Section 9 or Section 10 above will cause the Company immeasurable and
irreparable harm for which there is no adequate remedy at law, and as a result
of this, the Company shall be entitled to seek the issuance by a court of
competent jurisdiction of an injunction, restraining order or other equitable
relief in favor of itself, without the necessity of posting a bond, restraining
the Executive from committing or continuing to commit any such violation.
 
13.         No Mitigation; Offset.  The Executive is under no obligation to
mitigate damages or the amount of any payment provided for hereunder by seeking
other employment or otherwise and, except as otherwise provided in Section 5 of
this Agreement, such amounts shall not be reduced whether or not the Executive
obtains other employment (provided such employment is after the Separation Date
and consistent with Section 10 hereof).  Notwithstanding anything herein to the
contrary or otherwise, the Executive’s equity awards shall be subject to
cancellation and recoupment by the Company, and shall be repaid by the Executive
to the Company, to the extent required by law or regulation or pursuant to any
listing requirement for the Company’s stock, or by any Company policy or
agreement.
 
14.         Indemnification; Tax Matters; Resolution of
Disputes.  Notwithstanding the other provisions of this Agreement, the
indemnification and other provisions set forth in paragraphs 18, 19, 28 and 29
of the Employment Agreement are incorporated by reference in this Agreement and
shall remain in full force and effect; provided, however, where applicable any
 

 
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reference to “you” or “this Agreement” in such sections shall mean the Executive
and this Retirement Agreement, respectively.
 
15.         Compliance with Section 409A of the Code.  Notwithstanding other
provisions of this Agreement, the provisions relating to Section 409A of the
Code set forth in the Employment Agreement (including, without limitations,
those provisions set forth in paragraphs 3(d), 4 and 11(b)  of the Employment
Agreement) are incorporated by reference in this Agreement and shall remain in
full force and effect.
 
16.         Entire Agreement. As of the date hereof, this Agreement sets forth
the entire agreement of the Company and the Executive with respect to the
subject matter hereof, and, as of the date hereof, supercedes in its entirety
the Employment Agreement and any compensation and/or severance plan, policy or
arrangement of the Company or any other agreement, plan, policy or arrangement
with respect to the subject matter hereof; provided that (x) if the Executive
dies prior to the Resignation Date, his estate shall be entitled to the payments
and entitlements set forth in paragraph 6 of the Employment Agreement and shall
not be entitled to any payment, benefit or entitlement pursuant to this
Agreement, (y)  if the Executive’s employment is terminated for Cause or he
terminates his employment, in each case prior to December 31, 2012, he shall
only be entitled to the provisions of Sections 4 and 7 above (with the
Separation Date being the date the Executive’s employment so terminates) and his
equity awards shall be treated in accordance with the applicable plan and award
agreements, and (z) if there is a Change in Control prior to December 31, 2012
and the Executive receives written notice from the Company that his employment
is being terminated without Cause on or after the date of the Change in Control
but prior to December 31, 2012, he shall be entitled to the payments and
benefits under paragraph 8 of the Employment Agreement and this Agreement shall
be null and void and of no further effect as of the date of such notice.  For
the avoidance of doubt, in no event shall paragraphs 5 or 9 of the Employment
Agreement apply for any termination of the Executive’s employment on or after
the date of this Agreement, and if the Executive remains employed through
December 31, 2012 then he shall only be entitled to the payments under Section 5
of this Agreement and not any payment, benefit or entitlement under the
Employment Agreement, including, without limitation, pursuant to paragraph 8 of
the Employment Agreement.  In addition, if the Company terminates the
Executive’s employment for any reason prior to December 31, 2012 other than for
Cause or because the Executive breached the terms of this Agreement and provided
a Change in Control has not occurred prior to such termination date, the
Executive shall be entitled to the payments and benefits of this Agreement as if
he remained employed through December 31, 2012.  Without limiting the generality
of the foregoing, the Executive expressly acknowledges and agrees that except as
specifically set forth in Section 4, 5, 6, and 7 of this Agreement, he is not
entitled to receive any severance pay, severance benefits, compensation or
employee benefits of any kind whatsoever from the Company on and after the date
hereof.  As of the date hereof, the Executive expressly waives his right to
terminate his employment for Good Reason under the Employment Agreement.
 
17.         Assignability; Binding Nature; Severability.  Notwithstanding the
other provisions of this Agreement, the provisions of paragraphs 22 and 24 of
the Employment Agreement are incorporated by reference in this Agreement and
shall remain in full force and effect; provided, however, that any reference to
“this Agreement” in such sections shall mean this Retirement Agreement.
 

 
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18.         Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of New York without reference to principles of
conflicts of law.
 
19.         Notices.  Any notice given to a party to this Agreement (a “Party”)
shall be in writing and shall be deemed to have been given (i) when delivered
personally (provided that a written acknowledgement of receipt is obtained),
(ii) three days after being sent by certified or registered mail, postage
prepaid, return receipt requested, or (iii) two days after being sent by
overnight courier (provided that a written acknowledgment of receipt is obtained
by the overnight courier), with any such notice duly addressed to the Party
concerned at the address indicated below or to such other address as such Party
may subsequently designate by written notice in accordance with this Section 19:
 

 
If to the Company:
 
The Warnaco Group, Inc.
     
501 Seventh Avenue
     
New York, New York 10018
Attention: General Counsel
         
If to the Executive:
 
The most recent address in the Company’s records.
       

 
20.         Withholding of Taxes.  The tax withholding and other provisions set
forth in paragraph 27 of the Employment Agreement are incorporated by reference
in this Agreement and shall remain in full force and effect.
 
21.         Miscellaneous.  No provision of this Agreement may be amended unless
such amendment is agreed to in writing and signed by the Executive and an
authorized officer of the Company.  No waiver by either Party of any breach by
the other Party of any condition or provision contained in this Agreement to be
performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent
time.  Any waiver must be in writing signed by the Party against whom it is
being enforced (either the Executive or an authorized officer of the Company, as
the case may be). The captions used in this Agreement are designed for
convenient reference only and are not to be used for the purpose of interpreting
any provision of this Agreement.
 
22.         Counterparts.  This Agreement may be executed in one or more
counterparts, including by facsimile signature, each of which shall be deemed to
be an original but all of which together will constitute one and the same
agreement.
 

 
[Remainder of page is left intentionally blank]
 

 
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first set forth above.

 
THE WARNACO GROUP, INC.
             
By: 
/s/ Jay L. Dubiner
 
Name:  Jay L. Dubiner
 
Title:     Executive Vice President, General Counsel

 
THE EXECUTIVE
         
/s/ Frank Tworecke   
 
Frank Tworecke

 
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EXHIBIT A

AGREEMENT AND RELEASE OF CLAIMS

 
THIS AGREEMENT AND RELEASE is executed by the undersigned (the “Executive”) as
of the date hereof.

WHEREAS, the Executive and The Warnaco Group, Inc. (the “Company”) entered into
a retirement agreement dated as of April 25, 2012 (the “Retirement Agreement”);

WHEREAS, the Executive has certain entitlements pursuant to the Retirement
Agreement subject to the Executive’s executing this Agreement and Release and
complying with its terms.

NOW, THEREFORE, in consideration of the payments set forth in Section 5 of the
Retirement Agreement and other good and valuable consideration, the Executive
agrees as follows:
 
The Executive, on behalf of himself and his dependents, heirs, administrators,
agents, executors, successors and assigns (the “Executive Releasors”), hereby
releases and forever discharges the Company and its affiliated companies and
their past and present parents, subsidiaries, successors and assigns and all of
the aforesaid companies’ past and present officers, directors, employees,
trustees, shareholders, representatives and agents (the “Company Releasees”),
from any and all claims, demands, obligations, liabilities and causes of action
of any kind or description whatsoever, in law, equity or otherwise, whether
known or unknown, that any Executive Releasor had, may have had or now has
against the Company or any other Company Releasee as of the date of execution of
this Agreement and Release arising out of or relating to the Executive’s
employment relationship, or the termination of that relationship, with the
Company (or any affiliate), including, but not limited to, any claim, demand,
obligation, liability or cause of action arising under any Federal, state, or
local employment law or ordinance (including, but not limited to, Title VII of
the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act,
the Americans With Disabilities Act of 1991, the Workers Adjustment and
Retraining Notification Act, the Employee Retirement Income Security Act (other
than any claim for vested benefits), the Family and Medical Leave Act, and the
Age Discrimination in Employment Act, as amended by the Older Workers’ Benefit
Protection Act (“ADEA”)), tort, contract, or alleged violation of any other
legal obligation (collectively “Released Executive Claims”).  In addition, in
consideration of the promises and covenants of the Company, the Executive, on
behalf of himself and the other Executive Releasors, further agrees to waive any
and all rights under the laws of any jurisdiction in the United States, or any
other country, that limit a general release to any of the foregoing actions,
causes of action, claims or charges that are known or suspected to exist in the
Executive’s favor as of the date of this Agreement and Release.  Anything to the
contrary notwithstanding in this Agreement and Release or the Retirement
Agreement, nothing herein shall release any Company Releasee from any claims or
damages based on (i) any right or claim that arises after the date of this
Agreement and Release pertaining to a matter that arises after such date, (ii)
any right the Executive may have to enforce Sections 4, 5, 6, 7 or 14 of the
Retirement Agreement, (iii) any right or claim the Executive may

 
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have to benefits that have accrued or vested as of the Date of Termination or
any right pursuant to any qualified retirement plan or (iv) any right the
Executive may have to be indemnified by the Company to the extent such
indemnification by the Company or any Affiliate is permitted by applicable law
or the Company’s by-laws.

The Executive understands that nothing in this Agreement and Release shall be
construed to prohibit him from filing a charge with, or participating in any
investigation or proceeding conducted by, the Equal Employment Opportunity
Commission, National Labor Relations Board, and/or any federal, state or local
agency.  Notwithstanding the foregoing, the Executive hereby waives any and all
rights to recover monetary damages in any charge, complaint, or lawsuit filed by
him or by anyone else on his behalf based on events occurring prior to the date
of this Agreement and Release.

The Executive agrees that he shall continue to be bound by, and will comply
with, the provisions of Sections 8, 9, 10 and 11 of the Retirement Agreement and
the provisions of such sections, along with Section 12 and 13 of the Retirement
Agreement, shall be incorporated fully into this Agreement and Release.

The Executive acknowledges that he has been provided a period of at least
21 calendar days in which to consider and execute this Agreement and
Release.  The Executive further acknowledges and understands that he has seven
calendar days from the date on which he executes this Agreement and Release to
revoke his acceptance by delivering to the Company written notification of his
intention to revoke this Agreement and Release in accordance with Section 19 of
the Retirement Agreement.  This Agreement and Release becomes effective when
signed unless revoked in writing and in accordance with this seven-day
provision.  To the extent that the Executive has not otherwise done so, the
Executive is advised to consult with an attorney prior to executing this
Agreement and Release.

This Agreement and Release shall be governed by and construed and interpreted in
accordance with the laws of New York without reference to principles of
conflicts of law.  Capitalized terms, unless defined herein, shall have the
meaning ascribed to such terms in the Retirement Agreement.

IN WITNESS WHEREOF, the Executive has executed this Agreement and Release as of
the date hereof.

 
 
 
Frank Tworecke

 
Date: 
     

 
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Frank Tworecke Equity Summary
Schedule I

23-Feb-12

Assumes December 31, 2012 retirement date
Grant Type
Plan ID
Grant Date
Grant Price
Options/RES Granted
Options Exercised/RES lapsed
Options/RES Outstanding
Options Exercisable
Options/RES Vested
Vesting Date
Options/RES Vesting
Vesting Date
Options/RES Vesting
Vesting Date
Options/RES Vesting
Last date to Exercise
                               
Stock Option Summary1, 2
                         
NQ
2005
03/07/2007
$27.07
20,400
7,400
13,000
13,000
13,000
           
03/31/2013
NQ
2005
05/14/2008
$50.13
20,200
0
20,200
20,200
20,200
           
03/31/2013
NQ
2005
05/13/2009
$27.02
30,400
0
30,400
20,267
20,267
03/04/2012
10,133
       
03/31/2013
NQ
2005R
03/03/2010
$43.28
16,100
0
16,100
5,367
5,367
03/03/2012
5,366
03/03/2013
5,367
   
12/31/2014
NQ
2005R
03/01/2011
$55.57
11,300
0
11,300
0
0
03/01/2012
3,767
03/01/2013
3,766
03/01/2014
3,767
12/31/2014
       
98,400
 
91,000
58,834
58,834
                                                                             
Restricted Stock/Unit Summary 2
                         
RES
2005
03/04/2009
$0.00
11,049
7,366
3,683
0
0
03/04/2012
3,683
         
RES
2005
05/13/2009
$0.00
12,100
0
12,100
0
0
03/04/2012
12,100
         
RSU
2005R
03/03/2010
 
7,250
0
7,250
0
0
03/03/2013
7,250
         
RSU
2005R
03/01/2011
 
5,200
0
5,200
0
0
03/01/2014
5,200
                 
35,599
 
28,233
                                                                               
 
Performance Share/Unit Summary 2,3
                       
PU
2005R
03/03/2010
$0.00
7,250
0
7,250
0
0
03/03/2013
7,250
         
PU
2005R
03/01/2011
$0.00
5,200
0
5,200
0
0
03/01/2014
5,200
                 
12,450
 
12,450
                 

Notes:

 
1
 
Options granted in 2009 or earlier that vest prior to retirement or thereafter
must be exercised within 3 months of retirement
 
2
 
Equity granted in 2010 and later is retirement eligible and therefore continues
to vest after retirement, and remains exercisable for 2 years from retirement,
subject to the terms of the applicable award agreements.
 
3
 
Actual number of Performance Shares/Units vesting is contingent on performance
and applicable award agreement. Shares shown are at target.

This schedule is subject to the applicable plan and award agreement, including,
if applicable, any requirement not to engage in "Competitive Activity" in order
to be eligible for continued vesting of equity awards or to exercise any vested
options.