FORM

Exhibit 10(a)

 

Liz Claiborne Inc.

Executive Severance Agreement

 

This Executive Severance Agreement (this “Agreement”), dated as of the [  ]st
day of [      ], [          ] (the “Effective Date”), is by and between LIZ
CLAIBORNE, INC., a Delaware corporation (the “Company”), and
[                          ] (the “Executive”).

 

WHEREAS, the Company’s Board of Directors (the “Board”) 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 prior to a change in control situation; and

 

WHEREAS, the Board believes it is in the Company’s best interests to assure that
Executive will refrain from certain competitive activities with the Company as
described herein;

 

NOW, THEREFORE, to assure the Company that 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 the
Company hereinafter, for the benefit of the Company and its shareholders, and
for other good and valuable consideration, the Company and the Executive agree
as follows:

 

 

1.

Term of Agreement

 

The term of this Agreement shall commence immediately upon the Effective Date
and end on December 31, 2007, unless terminated sooner in accordance with
Section 2, provided, however, that such term shall be automatically renewed for
successive one-year terms. The phrase “Employment Period” as used herein shall
refer to the initial term as well as any renewal terms.

 

 

2.

Termination

 

(a)        Cause. The Employment Period will terminate at the election of the
Company for Cause immediately upon notice from the Company to Executive. As used
herein, the term “Cause” means:

 

(i)           Executive’s willful and intentional repeated failure or refusal,
continuing after notice that specifically identifies the breach(es) complained
of, to perform substantially his or her material duties, responsibilities and
obligations (other than a failure resulting from Executive’s incapacity due to
physical or mental illness or other reasons beyond the control of Executive),
and which failure or refusal results in demonstrable direct and material injury
to the Company;

 

(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 the Company; or

 

(iii)         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;

 

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

 

(c)        Cause Determination. Executive’s termination for Cause must be
pursuant to a resolution (a “Cause Resolution”) duly adopted by the affirmative
vote of not less than two thirds (2/3) of the Board then in office at a meeting
of the Board called upon reasonable notice to all directors and held for such
purpose, after reasonable notice to the Executive and an opportunity for the
Executive,

 

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together with his or her counsel (if the Executive so chooses), to be heard
before the Board at such meeting, finding that, in the good faith opinion of the
Board, the Executive had committed an act constituting “cause” as herein defined
and specifying the particulars thereof in detail.

 

(d)        Death; Disability. The Employment Period will terminate forthwith
upon Executive’s death or, at the Company’s option, by written notice to
Executive (or Executive’s legal representative) upon Executive’s Disability. As
used herein the term “Disability” means any physical or mental condition that
would qualify Executive for a disability benefit under the long-term disability
plan maintained by the Company, or, if there is no such plan, a physical or
mental condition that prevents Executive from performing the essential functions
of Executive’s position (with or without reasonable accommodation) for a period
of six consecutive months. A determination of Disability will be made by a
physician satisfactory to both Executive and the Company; provided that if
Executive and the Company 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 Executive and the Company.
Executive, Executive’s legal representative or any adult member of Executive’s
immediate family shall have the right to present to the Company and such
physician such information and arguments on Executive’s behalf as Executive or
they deem appropriate, including the opinion of Executive’s personal physician.

 

 

3.

Severance

 

(a)        Termination For Cause; Voluntary Termination Without Good Reason;
Termination Due to Death or Disability. In the event that the Employment Period
is terminated due to (i) a termination by the Company for Cause, (ii)
Executive’s resignation without Good Reason (as defined herein), or (iii) a
termination of Executive’s employment due to Executive’s death or Disability,
the Company will pay to Executive an amount equal to Executive’s accrued but
unpaid base salary through the date of such termination, and, in the case of
death or Disability, shall continue the medical and dental insurance coverage
for Executive’s family as provided in Section 3(b) below.

 

(b)        Termination Without Cause; Voluntary Termination For Good Reason.
Subject to Section 3(d), in the event that the Employment Period is terminated
(i) by the Company other than for Cause and other than upon Executive’s death or
Disability or (ii) by Executive for Good Reason (as defined herein), then (A)
the Company shall pay to Executive an amount equal to Executive’s accrued but
unpaid base salary through the date of such termination, (B) so long as
Executive shall not have breached Executive’s obligations to the Company under
Sections 4 and 5 hereof (without limitation to any other remedy available to the
Company), the Company shall provide Executive and Executive’s family with
coverage substantially identical to that provided to other senior executives of
the Company in its medical, dental, vision, and executive life insurance
programs (subject in the case of life insurance to insurability at standard
rates) for 6 months following the date of such termination, and (C) the Company
shall pay to Executive, as and for a severance payment, the sum of Executive’s
then current annual base salary and Executive’s then current Target Bonus as
soon as practicable (but in no event later than 20 days after the termination
date), subject to Section 3(f).

 

For the purposes of this Agreement, “Good Reason” shall mean the occurrence of
one or more of the following events: (1) Executive’s being assigned duties
inconsistent with Executive’s position at the applicable date, without
Executive’s consent; (2) the Company’s moving its principal executive offices by
more than 20 miles if such move increases Executive’s commuting distance by more
than 20 miles; (3) a material reduction in Executive’s base salary; or (4) a
material breach by the Company of any of its material obligations under any
employment agreement between Executive and the Company then in effect. Unless
Executive shall give the Company notice of any event which, after any applicable
notice and the lapse of any applicable 20-day grace period, would constitute
Good Reason within 180 days of Executive’s first knowing of the event, such
event shall cease to be an event constituting Good Reason.

 

(c)         General. In the event that the Employment Period is terminated for
any reason, the Company’s payment of severance as provided in the previous
paragraphs of this Section 3 (together with reimbursement of Executive’s
reasonable and necessary out-of-pocket business expenses incurred through such
date in accordance with the Company’s standard policy in effect at such time),
the maintenance of continued participation in the Company’s medical, dental,
vision, and executive life insurance programs, if applicable, under this Section
3, and the vesting, continuation and payment of the other compensation,
perquisites and benefits as provided in any other Company plans shall constitute
complete satisfaction of all obligations of the Company to Executive pursuant to
this

 

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Agreement. Upon any such termination, Executive shall cease to be an employee of
the Company for all purposes and except as otherwise expressly set forth in this
Section 3 or Section 9 of this Agreement the Company shall have no obligation
under this Agreement to provide Executive with any employee benefits or
perquisites hereunder.

 

(d)        Release Requirement. The Company expressly conditions its provision
of all payments and benefits due to Executive pursuant to this Section 3 on
receipt from Executive of a full release of all claims against the Company, and
its officers, directors, and affiliates, in a form and manner reasonably
acceptable to the Company.

 

(e)        Sole Remedy. Executive’s rights set out in this Section 3 (including
rights in the other sections of this Agreement and the other Company plans
referred to in Section 3(c)) shall constitute Executive’s sole and exclusive
rights and remedies as a result of Executive’s actual or constructive
termination of employment without Cause, and Executive hereby waives any such
other claims against the Company in such event.

 

(f)         Compliance with Section 409A. Notwithstanding anything to the
contrary, to the extent necessary to prevent Executive from being subject to tax
under Section 409A of the Internal Revenue Code of 1986, as amended, payments to
be made following termination of employment shall not be paid until the
six-month anniversary of the Executive’s termination of employment.

 

 

4.

Confidentiality

 

(a)        The Company 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 the Company to Executive, but also information
developed or learned by Executive during the course or as a result of employment
hereunder, which information Executive acknowledges is and shall be the sole and
exclusive property of the Company. Confidential Information includes all
proprietary information that has or could have commercial value or other utility
in the business in which the Company is engaged or contemplates engaging, and
all proprietary information of which the unauthorized disclosure could be
detrimental to the interests of the Company, whether or not such information is
specifically labeled as Confidential Information by the Company. By way of
example and without limitation, Confidential Information includes any and all
information developed, obtained or owned by the Company 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,
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 Executive; (ii) becomes generally known or generally
available to the public subsequent to disclosure to Executive through no
wrongful act of any person or (iii) which Executive are required to disclose by
applicable law, regulation, or legal process (provided that, unless prohibited
by law, Executive provides the Company with prior notice of the contemplated
disclosure and reasonably cooperates with the Company at the Company’s expense
in seeking a protective order or other appropriate protection of such
information).

 

(b)        Executive acknowledges and agrees that in the performance of
Executive’s duties hereunder the Company will from time to time disclose to
Executive and entrust Executive with Confidential Information. Executive also
acknowledges and agrees that the unauthorized disclosure of Confidential
Information, among other things, may be prejudicial to the Company’s interests,
an invasion of privacy and an improper disclosure of trade secrets. Executive
agrees that 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 Executive’s
assigned duties and for the benefit of the Company, any Confidential
Information, either during the Employment Period or thereafter.

 

(c)        In the event Executive’s employment with the Company ceases for any
reason, Executive will not remove from the Company’s premises without its prior
written consent any records,

 

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files, drawings, documents, equipment, materials or writings received from,
created for or belonging to the Company, including those which relate to or
contain Confidential Information, or any copies thereof. Upon request or when
Executive’s employment with the Company terminates, Executive will immediately
deliver the same to the Company.

 

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

 

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

 

(f)         The provisions of this Section 4 shall survive the termination of
this Agreement and the Employment Period.

 

5. Restrictive Covenants

 

(a)        Executive acknowledges and agrees (i) that the services to be
rendered by Executive for the Company are of a special, unique, extraordinary
and personal character, (ii) that Executive has and will continue to develop a
personal acquaintance and relationship with one or more of the Company’s
customers, employees, suppliers and independent contractors, which may
constitute the Company’s primary or only contact with such customers, employees,
suppliers and independent contractors, and (iii) that Executive will be uniquely
identified by customers, employees, suppliers, independent contractors and
retail consumers with the Company’s products. Consequently, Executive agrees
that it is fair, reasonable and necessary for the protection of the business,
operations, assets and reputation of the Company that Executive make the
covenants contained in this Section 8.

 

(b)        Executive agrees that, during the Employment Period and for a period
of 18 months thereafter, 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 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 of
the companies listed in Exhibit A or their affiliates.

 

(c)         Executive agrees that, during the Employment Period and for a period
of 18 months thereafter, Executive shall not, directly or indirectly,

 

(i)            persuade or seek to persuade any customer of the Company to cease
to do business or to reduce the amount of business which any customer has
customarily done or contemplates doing with the Company, whether or not the
relationship between the Company and such customer was originally established in
whole or in part through 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 Executive’s employment hereunder was in the employ of the Company
or was an independent contractor providing material manufacturing, marketing,
sales, financial or management consulting services in connection with the
business of the Company and with whom Executive had regular contact; or

 

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

 

As used in this Section 5, the terms “customer” and “supplier” shall mean and
include any individual,

 

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

 

(d)        Executive agrees that, during the Employment Period and for a period
of 18 months thereafter, Executive will take no action which is intended, or
would reasonably be expected, to harm the Company or its reputation or which
would reasonably be expected to lead to unwanted or unfavorable publicity to the
Company.

 

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

 

6. Specific Performance

 

Executive acknowledges that the Company would sustain irreparable injury in the
event of a violation by Executive as of any of the provisions of sections 4 or 5
hereof, and by reason thereof Executive consents and agrees that if Executive
violates any of the provisions of said Sections 4 or 5, in addition to any other
remedies available, the Company shall be entitled to a decree specifically
enforcing such provisions, and shall be entitled to a temporary and permanent
injunction restraining Executive from committing or continuing any such
violation, from any arbitrator duly appointed in accordance with the terms of
this Agreement or any court of competent jurisdiction, without the necessity of
proving actual damages, posting any bond, or seeking arbitration in any forum.

 

7. Withholding

 

The parties understand and agree that all payments to be made by the Company
pursuant to this Agreement shall be subject to all applicable tax withholding
obligations of the Company.

 

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 the Company shall be addressed
to the Chief Financial Officer, Liz Claiborne, Inc., One Claiborne Avenue, North
Bergen, NJ 07047, or at such other address as the Company 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
the Company 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)

This Agreement has been made and will be governed in all respects by the laws of
the

 

 

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State of New York applicable to contracts made and to be wholly performed within
such state and the parties hereby irrevocably consent to the jurisdiction of the
courts of the State of New York and federal courts located therein for the
purpose of enforcing this Agreement.

 

(d)        Any controversy arising out of or relating to this Agreement or the
breach hereof shall be settled by arbitration in the City of New York in
accordance with the rules then obtaining of the American Arbitration Association
and judgment upon the 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 Section 4 or 5 hereof,
the Company in its sole discretion shall be entitled to seek injunctive relief
from a court of competent jurisdiction without any requirement to 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) Executive makes a claim against the Company
under this Agreement, (ii) the Company disputes such claim, and (iii) Executive
prevails with respect to such disputed claim, then the Company shall reimburse
Executive for Executive’s reasonable costs and expenses (including reasonable
attorney’s fees) incurred by Executive in pursuing such disputed claim.

 

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

 

(f)         The provisions of this Agreement which by their terms call for
performance subsequent to termination of the Employment Period, or of this
Agreement, shall so survive such termination.

 

(g)        Executive shall not be required to mitigate, by seeking employment or
otherwise, the amount of any payment or benefit provided for in this Agreement,
or under the Incentive Plan, RIAP, Section 162(m) Cash Bonus Plan, or other plan
maintained by the Company, including without limitation any payment or benefit
made or vested upon or as a result of the termination of Executive’s employment,
nor will any compensation, income, or other benefit from any source whatsoever
create any mitigation, offset or reduction against any such payment or benefit.

 

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.

 

 

By: ___________________

 

 

Paul R. Charron

 

 

Chairman of the Board and Chief Executive Officer

 

 

 

 

[Executive]:

 

 

_____________________

 

 

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