Exhibit 10.1

 

SEPARATION AGREEMENT

 

This Separation Agreement (“Agreement”) is entered into by and between TAILORED
SHARED SERVICES, LLC (“SSU”), a wholly owned subsidiary of Tailored Brands, Inc.
(“TBI”) (collectively, SSU and TBI shall be referred to as “TAILORED BRANDS” or
the “Company”), and DOUGLAS S. EWERT (“Ewert”).

 

Recitals

 

i.                                           Ewert was employed by TAILORED
BRANDS at its corporate office in Fremont, California pursuant to a Second
Amended and Restated Employment Agreement, dated June 21, 2018, by and between
TBI, SSU and Ewert (the “Employment Agreement”).

 

ii.                                        The Employment Agreement is
incorporated herein by reference and, to the extent it survives Ewert’s
termination of employment, remains in full force and effect, except as to where
it is amended specifically by this Agreement.  Without limiting the generality
of the previous sentence, the provisions of Section 9 (Restrictive Covenants)
and Section 10 (Forfeiture for Cause) of the Employment Agreement will remain in
full force and effect following Ewert’s termination of employment in accordance
with their terms and conditions.

 

iii.                                     In consideration of Ewert’s acceptance
of this Agreement and, pursuant to it, TAILORED BRANDS is agreeable to paying to
Ewert the payments and benefits under this Agreement.

 

iv.                                    In consideration of TAILORED BRANDS’
acceptance of this Agreement and its agreement to pay Ewert the payments and
benefits under this Agreement, Ewert is willing to execute this Agreement and
the release of claims under this Agreement.

 

Based on these recitals and in consideration of the mutual promises and
agreements set forth in this Agreement, Ewert and the Company agree as follows:

 

Terms

 

1.                                     Termination of Employment.

 

a.                                Termination.  Ewert’s employment shall be
terminated on September 30, 2018 (“the Termination Date”).  Ewert acknowledges
and agrees that as of the Termination Date he shall resign from the TAILORED
BRANDS Board of Directors and shall cease to serve as an employee, officer,
agent or representative of TAILORED BRANDS and its direct and indirect
parent(s), subsidiaries and affiliates and shall not represent himself as being
any of the foregoing.  As of the Termination Date, Ewert will receive a lump sum
payment in cash, less applicable taxes and withholdings, to be paid in the
Company’s customary payroll cycle immediately following the Termination Date,
equal to (i) Ewert’s annual salary earned through the Termination Date; (ii) any
accrued vacation pay earned by Ewert; and (iii) any unreimbursed business
expenses of Ewert, in each case, to the extent not theretofore paid.

 

b.                                Payments and Benefits.  Conditioned upon
Ewert’s acceptance of and compliance with the terms and conditions of this
Agreement and non-revocation of the release of claims herein during the
applicable revocation period, the Company shall provide the following payments
and benefits to Ewert, less applicable taxes and withholdings:

 

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i.                                          An amount equal to two times Ewert’s
annual salary in effect as of the Termination Date, $2,500,000, (“Annual
Salary”), plus two times the target Bonus in effect for Ewert for the fiscal
year of the Company which includes the Termination Date, $2,500,000 (the “Target
Bonus Severance”), hereinafter, the Annual Salary and the Target Bonus Severance
which together total $5,000,000, shall be referred to as the “Severance
Payments” and will be payable in accordance with the following:

 

(A)                               An amount equal to $550,000 payable in
substantially equal installments in accordance with the customary payroll
practices of the Company commencing on the 38th day after the Termination Date
and ending on the date that is six months following Ewert’s Separation From
Service, as defined in the Employment Agreement (the “Separation Payment Date”);

 

(B)                               An amount equal to $700,000 payable in
substantially equal installments in accordance with the customary payroll
practices of the Company commencing on the 38th day after the Termination Date
and ending on the Separation Payment Date; and

 

(C)                               The remaining Severance Payments payable after
the Separation Payment Date, $3,750,000, through the second anniversary of the
Termination Date to be paid in substantially equal installments in accordance
with the customary payroll practices of the Company.

 

ii.                                       A lump sum payment in cash equal to
the Bonus determined by the Company in accordance with the Company’s annual cash
bonus program for executive officers to be earned by Ewert for the fiscal year
of the Company ending following the Termination Date, multiplied by a fraction,
the numerator of which is 240, and the denominator of which is 364, to be paid
on April 15, 2019.

 

iii.                                    All unvested stock options currently
held by Ewert will become fully vested on April 4, 2019 and all vested options,
including those vesting on April 4, 2019, may be exercised by Ewert, pursuant to
the terms of such options, at any time on or before the earlier to occur of the
stated expiration date for the option or the third anniversary of the
Termination Date.

 

iv.                                   14,011 deferred stock units (“DSU’s”) held
by Ewert that are scheduled to vest on April 13, 2021 will be forfeited on the
Termination Date.  All outstanding DSU’s granted on May 17, 2017 and held by
Ewert as of the Termination Date (70,422) will vest on the Termination Date and
be settled on or before April 15, 2019.  All other outstanding DSU’s held by
Ewert as of the Termination Date will vest and all restrictions will lapse in
accordance with the following schedule:

 

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Date

 

# of DSU’s Vesting

 

 

 

April 13, 2019

 

29,309

April 13, 2020

 

14,010

 

v.                                      All outstanding unvested performance
units held by Ewert as of the Termination Date will be forfeited as of the
Termination Date.

 

vi.                                   The Company will provide Ewert and his
spouse and eligible dependents who were covered under the Company’s group health
plan on the Termination Date and who, in the case of eligible dependents,
continue to be eligible dependents, with group health plan coverage (including
medical, dental and vision coverage) for a period following the Termination Date
(except as provided below) until the expiration of the continuation period
permitted under the provisions of Section 4980B of the Internal Revenue Code of
1986, as amended (the “Code”) (hereinafter, the “COBRA Continuation Period”)
which coverage will be substantially similar to that provided to executive
officers of the Company during such period and at a cost to Ewert, or to his
spouse if Ewert is deceased, as if Ewert had remained an executive officer of
the Company during such period.  Ewert shall pay the full cost of the premiums
for such coverage, as determined and set under the then current practices of the
Company, on the first day of each month such coverage is provided and the
Company shall reimburse Ewert the excess, if any, of the amount Ewert pays to
the Company above the amount of the applicable premium that Ewert would have
paid for comparable coverage if he had remained an executive officer of the
Company during the period such coverage is provided (the “Reimbursement
Amounts”).  Any Reimbursement Amounts to be paid by the Company to Ewert under
this Section 1(b)(vi) shall be made on the tenth day of each month Ewert pays
the amount required by this Section 1(b)(vi) to the Company commencing on the
first such date immediately following the 38th day after the Termination Date
(the “First Reimbursement Date”), and any installment of the Reimbursement
Amount that would have otherwise been paid prior to the First Reimbursement Date
shall instead be accumulated and paid on the First Reimbursement Date.  Subject
to Ewert’s group health plan coverage continuation rights under Section 4980B of
the Code, the benefits described in this Section 1(b)(vi) shall (A) be reduced
(on a participant by participant basis) to the extent benefits of the same type
are received by Ewert, his spouse or any eligible dependent from any other
person during such period; and (B) cease if Ewert (I) obtains other employment
that offers participation in a health insurance plan providing substantially
similar benefits during such period or (II) violates Section 9(a) of the
Employment Agreement, and provided, further, that Ewert shall have the
obligation to notify the Company that he or they are receiving such benefits.

 

vii.                                If, at the end of the COBRA Continuation
Period, the Company’s obligation to provide group health plan coverage has not
ceased pursuant to the provisions of Section 1(b)(vi)(B), then the Company will
provide Ewert, his spouse and his then eligible dependents with group health
plan coverage (including medical, dental and vision coverage) for a period
following the end of the COBRA Continuation Period (except as provided below)
until Ewert attains age 65; provided, that, if the Company’s obligation under
this Section 1(b)(vii) has not ceased pursuant to the provisions of
Section 1(b)(vii)(B) at the time Ewert attains age 65, the Company will continue
to provide his spouse with group health plan coverage (including medical, dental
and vision coverage) under this Section 1(b)(vii) until she attains age 65.  The
coverage to be

 

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provided under this Section 1(b)(vii) will be substantially similar to that
being provided at the end of the COBRA Continuation Period; provided, that such
coverage shall not exceed, at any time, the coverage provided to executive
officers of the Company during such period.  Such coverage will be provided by
the Company through the purchase of an insurance policy for such purpose.  Ewert
will pay to the Company the applicable monthly premium that he would have paid
for comparable coverage if he had remained an executive officer of the Company
during the period such coverage is provided.  The benefits described under this
Section 1(b)(vii) shall (A) be reduced (on a participant by participant basis)
to the extent benefits of the same type are received by Ewert, his spouse or any
eligible dependent from any other person during such period; and (B) cease if
Ewert (I) obtains other employment that offers participation in a health
insurance plan providing substantially similar benefits during such period or
(II) violates Section 9(a) of the Employment Agreement, and provided, further,
that Ewert shall have the obligation to notify the Company that he or they are
receiving such benefits.

 

viii.                             Following the Termination Date, reimbursement
of an amount up to $50,000 for properly documented (A) legal fees and expenses
incurred by Ewert in connection with his entering into this Agreement; and
(B) expenses and fees incurred by Ewert for career coaching, counseling and
guidance.  The amounts to be reimbursed by the Company pursuant to this
Section 1(b)(viii) will be paid to Ewert as soon as administratively feasible
following his submission of proper documentation to the Company for the
incurrence of such expenses (in no event later than April 1, 2019); provided
that all amounts to be reimbursed hereunder will be paid by the Company to Ewert
on or before April 15, 2019.

 

ix.                                   Continued eligibility to use his Company
employee discount until the date of Ewert’s death.

 

x.                                      Any other benefits to which Ewert is
entitled under the terms and conditions of the Company’s plans and policies.

 

xi.                                   The Company agrees that Ewert is not
required to seek other employment or otherwise attempt in any way to mitigate or
otherwise reduce any payments or benefits payable to Ewert by the Company
pursuant to this Section 1(b) of this Agreement and, subject to the provisions
of Sections 1(b)(vi) and 1(b)(vii) hereof, in the event that Ewert obtains other
employment during the period in which he is receiving payments and benefits
under this Section 1(b), the Company shall not be entitled to any rights of
offset with respect to the payments and benefits payable to Ewert under this
Section 1(b).

 

2.                                      Release of Claims by Ewert.

 

a.                                      In consideration for the payments and
benefits provided for in Section 1 and other good and valuable consideration,
Ewert hereby releases TAILORED BRANDS, its parent companies, subsidiaries, and
affiliates and all of their respective officers, directors, shareholders,
employees, insurers and agents (collectively, the “Released Parties”) from any
and all claims, arising on or before the date of execution of this Agreement,
whether known or unknown, foreseen or unforeseen, asserted or unasserted,
including but not limited to those claims asserted or that could have been
asserted arising from or in any way related to his employment with and/or
separation from TAILORED BRANDS or any of its subsidiaries or affiliates, and
this release includes any claims he might have for re-employment or for
additional compensation or benefits, including claims for violations of the
California Labor Code, the federal Equal Pay Act,

 

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as amended, and the Fair Labor Standards Act and applies to claims under federal
law, state law, contract or tort, including but not limited to applicable state
civil rights laws, the California Fair Employment & Housing Act, Cal. Govt. Code
§ 12940 et. seq. (“FEHA”), the California Family Rights Act, Title VII of the
Civil Rights Act of 1964, as amended, the Post-Civil War Civil Rights Acts (42
U.S.C. Sections 1981-88), the Americans With Disabilities Act, the
Rehabilitation Act of 1973, Executive Order 11246, the Sarbanes-Oxley Act of
2002, Pub. L. No. 107-204, 116 Stat. 745, Family and Medical Leave Act, the Age
Discrimination in Employment Act (29 U.S.C. Section 621 et seq.) (“ADEA”), the
Older Workers Benefit Protection Act, and any regulations under such laws.
Further, Ewert acknowledges that he is receiving consideration for his release
of any claim under the ADEA in addition to anything of value to which he was
already entitled.

 

b.                                      Nothing in this Agreement is intended to
waive claims (i) for unemployment or workers’ compensation benefits, (ii) for
vested rights under any employee benefit plan covered under the provisions of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) as
applicable on the date this Agreement is signed, (iii) that may arise after this
Agreement is signed, (iv) related to coverage under indemnification agreements
or policies or under directors and officers insurance policies for acts or
omissions while providing services to the Company or any of its affiliates or
subsidiaries, or (v) which cannot be released as a matter of law by private
agreement. In addition, neither anything contained in this Agreement nor any
provision of the Employment Agreement that remains in full force and effect
shall prevent Ewert from filing a charge or complaint with or from participating
in an investigation or proceeding conducted by the EEOC, NLRB, or any other any
federal, state or local agency charged with the enforcement of any laws, or from
exercising rights under Section 7 of the NLRA to engage in joint activity with
other employees, although by signing this release Ewert hereby waives rights to
individual relief based on claims asserted in such a charge or complaint, except
where such a waiver of individual relief is prohibited (provided, however, that
nothing herein limits his right to receive an award for information submitted
pursuant to Section 21F of the Securities Exchange Act of 1934).

 

c.                                       Ewert understands and agrees that
claims or facts in addition to or different from those which are now known or
believed by him to exist may hereafter be discovered, but it is his intention to
fully and forever release, remise and discharge all claims which he had, may
have had, or now have against the Released Parties, whether known or unknown,
suspected or unsuspected, asserted or unasserted, contingent or non-contingent,
without regard to the subsequent discovery or existence of such additional or
different facts.

 

3.                                      No Suit.  Ewert represents and warrants
that he has not previously filed, and to the maximum extent permitted by law
agrees that he will not file, a complaint, charge, or lawsuit against any of the
Released Parties regarding any of the claims released herein.  If,
notwithstanding this representation and warranty, Ewert filed or files such a
complaint, charge, or lawsuit, Ewert agrees that he shall cause such complaint,
charge, or lawsuit to be dismissed with prejudice and shall pay any and all
costs required in obtaining dismissal of such complaint, charge, or lawsuit,
including without limitation the attorneys’ fees of any member of the Released
Parties against whom he has filed such a complaint, charge, or lawsuit.

 

4.                                      Cooperation Clause.  After the
Termination Date, Ewert agrees to exercise his best, good faith efforts to
(a) cooperate fully with the Company and its affiliates and their respective
counsel in connection with any pending or future litigation, arbitration,
administrative proceedings, or investigation relating to any matter that
occurred during his employment in which he was involved or of which he has
knowledge; and (b) respond in good faith to any

 

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telephone calls and/or information requests from the Company or its
representatives within a reasonable period of time. Ewert further agrees that,
in the event he is subpoenaed by any person or entity (including, but not
limited to, any government agency) to give testimony or provide documents (in a
deposition, court proceeding or otherwise), which in any way relates to his
employment by TAILORED BRANDS, he will give prompt notice of such request to the
General Counsel of the Company and, unless legally required to do so, will make
no disclosure until the Company and/or its affiliates have had a reasonable
opportunity to contest the right of the requesting person or entity to such
disclosure. Failure to cooperate or respond in a timely fashion will be
considered a material breach of this Agreement. If Ewert is required to travel
or incur other expenses as a result of any requests made to him by the Company
pursuant to this Cooperation Clause or if he should incur any expense in
responding to any subpoena by a third party, the Company shall bear, and
reimburse Ewert for, all reasonable out of pocket costs of any such expenses.

 

5.                                      Return of Company Property.  Ewert must
return to the Company all Company property in his possession, custody or
control, including, but not limited to, confidential or proprietary information,
computer equipment, software, and credit cards; provided that he may retain
possession of his Company issued laptop, mobile phone and iPad; provided,
however, that such retained devices have been properly reviewed and examined by
the Company to delete any and all confidential or proprietary information. It is
understood and agreed that all paper and electronic files, documents, memoranda,
letters, handbooks and manuals, facsimile and/or other communications concerning
TAILORED BRANDS and its business that were written, authorized, signed, received
and/or transmitted prior or during Ewert’s employment are and remain Company
property. Ewert further agrees that he has not and will not (a) copy any
computer files, documents or electronic messages to disks or compact disks;
(b) forward computer files, documents or electronic messages to personal e-mail
accounts or any other e-mail accounts; or (c) delete or destroy any documents,
computer files, or electronic messages contained on his computer or the
Company’s server.

 

6.                                      Voluntary Waiver. TAILORED BRANDS hereby
advises Ewert to consult with an attorney regarding this Agreement and the
release of claims contained herein. By signing below, Ewert acknowledges that he
has been advised by TAILORED BRANDS to consult with an attorney, and Ewert
agrees that he has had an opportunity to have an attorney of his choice review
this Agreement and the release contained herein before signing this Agreement.
Ewert acknowledges that he has carefully read and understands all of the
provisions of this Agreement and that he is executing this Agreement of his own
free will and without duress. Ewert also acknowledges receipt of the Agreement
on August 28, 2018, and that he has been given at least 21 days to consider it,
and that Ewert voluntarily signs it and agrees to be bound by its terms. Ewert
also understands and agrees that this Agreement must be signed no later than
September 18, 2018, in order for him to be entitled to the benefits given under
it.  Ewert also understands he may revoke the Agreement within 7 days after
signing it, and unless so revoked, the Agreement will be fully effective upon
expiration of the revocation period. Ewert understands and agrees that to revoke
this Agreement, written notice of the revocation must be received by the
following person no later than 11:59 p.m. Pacific Time on the seventh (7th) day
from the date this Agreement is signed:

 

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A. Alexander Rhodes

Executive Vice President, General Counsel, Chief Compliance Officer & Corporate
Secretary

Tailored Brands, Inc.

6100 Stevenson Boulevard

Fremont, CA 94538

Phone: 510.723.8669

 

7.                                      No Further Entitlements. Ewert
acknowledges and agrees that the payment(s), benefits, and obligations of the
Company to Ewert provided for in this Agreement are in full discharge of any and
all liabilities and obligations of the Company or any of its affiliates to him,
monetarily or with respect to employee benefits or otherwise, including but not
limited to any and all obligations arising under the Employment Agreement, any
alleged additional written or oral employment agreement, policy, plan or
procedure of TAILORED BRANDS or any of its affiliates and/or any alleged
understanding or arrangement between Ewert and TAILORED BRANDS or any of its
affiliates other than claims for accrued and vested benefits under an employee
benefit, insurance, or pension plan of TAILORED BRANDS or any of its affiliates
(but excluding any employee benefit plan providing severance or similar
benefits), subject to the terms and conditions of such plan(s).

 

8.                                      Taxes. The payments and provision of
benefits referenced in this Agreement shall be subject to withholding for all
applicable taxes, including but not limited to income, employment, and social
insurance taxes, as shall be required by law.

 

9.                                      Entire agreement. This Agreement and the
portions of the Employment Agreement that remain in full force and effect
following the Termination Date contain the entire agreement between Ewert and
the Company regarding Ewert’s termination of employment, and supersede any prior
or contemporaneous agreement, understanding, or representation concerning that
subject matter.

 

10.                               Civil Code Section 1542. This Agreement
constitutes a waiver and release of any and all claims which would otherwise be
preserved by operation of Section 1542 of the Civil Code of the State of
California, and under any and all similar laws of any governmental entity. 
Section 1542 of the Civil Code provides as follows:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her  favor at the time of executing the release,
which if known by him or her must have materially affected his or her settlement
with the debtor.

 

11.                               Binding on Successor. This Agreement shall be
binding upon the successors and/or assigns, if any, of TAILORED BRANDS.  In
light of the payment by TAILORED BRANDS of all amounts due to Ewert, he
acknowledges and agrees that California Labor Code section 206.5 is not
applicable. That section provides in pertinent part as follows:

 

No employer shall require the execution of any release of any claim or right on
account of wages due, or to become due, or made as an advance on wages to be
earned, unless payment of such wages has been made.

 

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12.                               Reimbursement of Reasonable Business Expenses.
By executing this Agreement, Ewert is not releasing any claims for reimbursement
of business-related expenses under Labor Code section 2802. Ewert is hereby
advised of his right to consult with an attorney of his choosing about this
business-related expenditures acknowledgement. Ewert hereby affirms that he has
received full and adequate reimbursement for any necessary business-related
expenditures or losses incurred in the course of employment with TAILORED BRANDS
and any of its parent companies or affiliates.

 

13.                               Governing Law. This Agreement will be governed
by Texas law without resort to conflict of law principles.

 

14.                               Jointly Drafted. The parties understand and
agree that this Agreement is deemed to have been drafted jointly by the parties.
Any uncertainty or ambiguity will not be construed for or against any party
based on attribution of drafting to any party.

 

15.                               Non-Admission. Nothing contained in this
Agreement will be deemed or construed as an admission of wrongdoing or liability
on the part of Ewert or the Company or any of its affiliates.

 

16.                               Compliance with Section 409A.  This Agreement
and the payments hereunder are intended to be exempt, to the greatest extent
possible, from the requirements of Section 409A of the Code (“Section 409A”) and
to the extent not so exempt, to comply with the requirements of Section 409A,
and the terms of this Agreement shall be construed and administered to give full
effect to such intent, and if necessary, any provision shall be held null and
void to the extent such provision (or part thereof) fails to comply with
Section 409A or the Treasury Regulations thereunder.  For purposes of
Section 409A, each payment of compensation under the Agreement shall be treated
as a separate payment of compensation.  Any amounts payable solely on account of
an involuntary termination shall be excludible from the requirements of
Section 409A, either as separation pay or as short-term deferrals to the maximum
possible extent.  Notwithstanding anything in this Agreement to the contrary,
any reimbursements or in-kind benefits provided under this Agreement shall be
made or provided in accordance with the requirements of Section 409A, including,
where applicable, the requirements that (a) any reimbursement is for expenses
incurred during the period of time specified in this Agreement, (b) the amount
of expenses eligible for reimbursement, or in-kind benefits provided, during any
taxable year of Ewert may not affect the expenses eligible for reimbursement, or
in-kind benefits to be provided, in any other taxable year of Ewert, (c) the
reimbursement of an eligible expense will be made no later than the last day of
Ewert’s taxable year following the year in which the expense is incurred, and
(d) the right to reimbursement or in-kind benefits is not subject to liquidation
or exchange for another benefit.  Nothing herein shall be construed as the
guarantee of any particular tax treatment to Ewert, and neither TAILORED BRANDS
nor any of its affiliates shall have any liability with respect to any failure
to comply with the requirements of Section 409A.

 

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Execution by Parties

 

The Company and Ewert acknowledge and represent that they have read this
Agreement, understand its terms, and enter into it knowingly and voluntarily.

 

TAILORED SHARED SERVICES, LLC

 

DOUGLAS S. EWERT

 

 

 

 

 

 

By:

/s/ Dinesh Lathi

 

/s/ Douglas S. Ewert

 

Dinesh Lathi

 

 

 

Executive Chair

 

 

 

Dated: August 28, 2018

 

Dated: August 28, 2018

 

 

TAILORED BRANDS, INC.

 

 

 

 

 

By:

/s/ Dinesh Lathi

 

 

Dinesh Lathi

 

 

Chairman of the Board

 

 

Dated: August 28, 2018

 

 

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