Exhibit 10.1
 
SEPARATION, CONSULTING AND RELEASE AGREEMENT
 
This Separation, Consulting and Release Agreement (this “Agreement”), delivered
January 18, 2013 (the “Effective Date”), confirms the following understandings
and agreements between Hampshire Group, Limited (the “Company”) and Heath L.
Golden (hereinafter referred to as “you” or “your”).
 
In consideration of the promises set forth herein, you and the Company agree as
follows:
 
1.           Employment Status and Separation Payments.
 
(a)             Employment Status. You acknowledge your separation from
employment with the Company and its direct and indirect subsidiaries, and
affiliates (collectively, with the Company, the “Company Group”) was effective
as of January 15, 2013 (the “Termination Date”), and after the Termination Date
you will not represent yourself as being an employee, officer, agent or
representative of the Company or any other member of the Company Group.  By
signing below, you hereby resign from any and all directorships, committee
memberships, and any other positions that you hold with the Company or any other
member of the Company Group, including, without limitation, your position as a
member of the Company’s board of directors (the “Board”), effective as of the
Termination Date.
 
(b)             Accrued Benefits. The Termination Date shall be the termination
date of your employment for purposes of participation in and coverage under all
benefit plans and programs sponsored by or through the Company and any other
member of the Company Group, except as otherwise provided herein.  Additionally,
you will be entitled to receive (i) all accrued but unpaid base salary through
the Termination Date, payable within ten (10) business days following the
Termination Date, (ii) any unpaid or unreimbursed expenses incurred in
accordance with the Company’s policies, (iii) payment in respect of your six (6)
accrued but unused vacation days as of the Termination Date, and (iv) any
benefits provided under the Company’s employee benefit plans upon a termination
of employment, in accordance with the terms contained therein.
 
(c)             Separation Payments. In consideration of your release and waiver
of claims set forth in paragraph 2 below, the Company will provide you with
severance benefits (collectively, the “Consideration”) of:
 
(i)            An amount equal to eighteen (18) months of your current annual
base salary, payable as follows: (A) an amount equal to four (4) months of your
annual base salary within five (5) business days of the Effective Date, (B) an
amount equal to four (4) months of your annual base salary will be paid on or
about February 15, 2013, (C) an amount equal to four (4) months of your annual
base salary will be paid on or about March 15, 2013, (D) an amount equal to four
(4) months of your annual base salary will be paid on or about April 15, 2013,
and (E) an amount equal to two (2) months of your annual base salary will be
paid on or about the earlier of May 15, 2013 and the date on which the Lease
Litigation (as defined below) is settled or otherwise resolved.
 
 
 

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(ii)           Subject to your election of COBRA continuation coverage under the
Company’s group health plan, on the first regularly scheduled payroll date of
each month of the first six (6) full calendar months following the Termination
Date, the Company will pay you an amount equal to the monthly COBRA premium
cost; provided, that the payments pursuant to this clause (ii) will cease
earlier than as provided in this paragraph in the event that you become eligible
to receive any health benefits, including through a spouse’s employer, prior to
the date of any such payment.  Amounts paid by the Company will be taxable to
the extent required to avoid adverse consequences to you or the Company under
either Section 105(h) of the Internal Revenue Code of 1986, as amended or the
Patient Protection and Affordable Care Act of 2010; and
 
(iii)          You shall have the right to “net exercise” (and “net withhold”)
all or any portion of your vested stock options to purchase shares of the
Company’s common stock outstanding as of the Termination Date at any time
through the expiration of such stock options in accordance with their respective
terms.
 
(d)           You acknowledge and agree that the payment(s) and other benefits
provided pursuant to this paragraph 1 are in full discharge of any and all
liabilities and obligations of the Company or any other member of the Company
Group to you, monetarily or with respect to employee benefits or otherwise,
including but not limited to any and all obligations arising under any alleged
written or oral employment agreement, policy, plan or procedure of the Company
or any other member of the Company Group and/or any alleged understanding or
arrangement between you and the Company or any other member of the Company Group
(other than claims for accrued and vested benefits under an employee benefit,
insurance, or pension plan of the Company or any other member of the Company
Group (excluding any employee benefit plan providing severance or similar
benefits), subject to the terms and conditions of such plan(s)).
 
2.           Release and Waiver of Claims.
 
(a)            As used in this Agreement, the term “claims” will include all
claims, covenants, warranties, promises, undertakings, actions, suits, causes of
action, obligations, debts, accounts, attorneys’ fees, judgments, losses and
liabilities, of whatsoever kind or nature, in law, equity or otherwise.
 
(b)            For and in consideration of the payments and benefits described
in paragraph 1 above, and other good and valuable consideration, you, for and on
behalf of yourself and your heirs, administrators, executors and assigns,
effective the date hereof, do fully and forever release, remise and discharge
each member of the Company Group and their successors and assigns, together with
their respective officers, directors, partners, shareholders, employees and
agents (collectively, and with the Company, the “Company Parties”) from any and
all claims whatsoever up to the date hereof which you had, may have had, or now
have against the Company Parties, whether known or unknown, for or by reason of
any matter, cause or thing whatsoever, including any claim arising out of or
attributable to your employment or the termination of your employment with the
Company, whether for tort, breach of express or implied employment contract,
intentional infliction of emotional distress, wrongful termination, unjust
dismissal, defamation, libel or slander, or under any federal, state or local
law dealing with discrimination based on age, race, sex, national origin,
handicap, religion, disability or sexual orientation.  This release of claims
includes, but is not limited to, all claims arising under the Age Discrimination
in Employment Act (“ADEA”), Title VII of the Civil Rights Act, the Americans
with Disabilities Act, the Civil Rights Act of 1991, the Family Medical Leave
Act, and the Equal Pay Act, each as may be amended from time to time, and all
other federal, state and local laws, the common law and any other purported
restriction on an employer’s right to terminate the employment of
employees.  The parties intend the release contained herein to be a general
release of any and all claims to the fullest extent permissible by law.
 
 
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(c)            You acknowledge and agree that as of the date you execute this
Agreement, you have no knowledge of any facts or circumstances that give rise or
could give rise to any claims under any of the laws listed in the preceding
paragraph.
 
(d)            By executing this Agreement, you specifically release all claims
relating to your employment and its termination under ADEA, a United States
federal statute that, among other things, prohibits discrimination on the basis
of age in employment and employee benefit plans.
 
(e)            Notwithstanding the foregoing, nothing in this Agreement shall be
a waiver of: (i) your rights with respect to payment of amounts under this
Agreement, (ii) your right to benefits due to terminated employees under any
employee benefit plan of the Company or any other member of the Company Group in
which you participated (excluding any severance or similar plan or policy), in
accordance with the terms thereof (including you rights to elect COBRA
coverage), (iii) any claims that cannot be waived by law including, without
limitation any claims filed with the Equal Employment Opportunity Commission,
the U.S. Department of Labor, or claims under the ADEA that arise after the date
of this Agreement; or (iv) your right of indemnification as provided by, and in
accordance with the terms of, the Company’s by-laws, charter or a Company
insurance policy providing such coverage, as any of such may be amended from
time to time.
 
(f)             You acknowledge and agree that by virtue of the foregoing, you
have waived any relief available to you (including without limitation, monetary
damages, equitable relief and reinstatement) under any of the claims and/or
causes of action waived in this paragraph 2.  Therefore you agree that you will
not accept any award or settlement from any source or proceeding (including but
not limited to any proceeding brought by any other person or by any government
agency) with respect to any claim or right waived in this Agreement.
 
3.           Consulting Appointment.
 
(a)           Effective as of the Termination Date, and through date that is
thirty (30) days following the Termination Date (the “Consulting Period”), you
shall serve as a consultant to the Company, rendering your assistance and
participation, giving at all times the full benefit of your knowledge,
expertise, technical skill and ingenuity, in all matters involved in or relating
to the on-going litigation involving the Company’s lease of its New York
headquarters (the “Lease Litigation”) and other issues as may arise from time to
time.  During the Consulting Period, it is expected that you will be required to
perform services on a part-time basis, as may be reasonably requested by the
Chairman of the Board.  Notwithstanding the foregoing, the Consulting Period
shall immediately terminate upon any breach by you of paragraph 5, 9, 10, 11 or
12 of this Agreement, and the Company shall have no further obligations under
this paragraph 3 upon such early termination.
 
 
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(b)           In connection with your provision of the consulting services set
forth herein, the Company will pay you aggregate consulting fees equal to
$10,000, which will be payable at the end of the Consulting Period.  The Company
will also reimburse you for reasonable out-of-pocket expenses incurred by you in
performing the consulting services contemplated hereunder in accordance with the
applicable expense reimbursement policies of the Company as in effect from time
to time.
 
(c)           As an independent contractor, you will be solely responsible for
payment of all applicable taxes payable in respect of amounts payable to you
under this paragraph 3, and the Company will not withhold for taxes from any
such amounts.  In addition, you understand and agree that you are not eligible
by virtue of your engagement as a consultant hereunder to participate in any of
the employee benefit plans or programs of the Company.  In the event that this
consulting arrangement is reclassified as employment by any governmental agency
or court, you further agree that you will not seek to participate in or benefit
from any of the employee benefit plans or programs of the Company as a result of
such reclassification.
 
4.           Knowing and Voluntary Waiver.  You expressly acknowledge and agree
that you:
 
(a)            Are able to read the language, and understand the meaning and
effect, of this Agreement;
 
(b)            Have no physical or mental impairment of any kind that has
interfered with your ability to read and understand the meaning of this
Agreement or its terms, and that you are not acting under the influence of any
medication, drug or chemical of any type in entering into this Agreement;
 
(c)            Are specifically agreeing to the terms of the release contained
in this Agreement because the Company has agreed to pay you the Consideration,
which the Company has agreed to provide because of your agreement to accept it
in full settlement of all possible claims you might have or ever had, and
because of your execution of this Agreement;
 
(d)            Acknowledge that but for your execution of this Agreement, you
would not be entitled to the Consideration;
 
(e)            Understand that, by entering into this Agreement, you do not
waive rights or claims under ADEA that may arise after the date you execute this
Agreement;
 
 
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(f)             Have consulted with your attorney regarding the terms and effect
of this Agreement; and
 
(g)            Have signed this Agreement knowingly and voluntarily.
 
5.           No Suit.  You represent and warrant that you have not previously
filed, and to the maximum extent permitted by law agree that you will not file,
a complaint, charge or lawsuit against any of the Company Parties regarding any
of the claims released herein.
 
6.           No Re-Employment.  You hereby agree to waive any and all claims to
re-employment with the Company or any other member of the Company Group.  You
affirmatively agree not to seek further employment with the Company or any other
member of the Company Group.
 
7.           Successors and Assigns.  The provisions hereof shall inure to the
benefit of your heirs, executors, administrators, legal personal representatives
and assigns and shall be binding upon your heirs, executors, administrators,
legal personal representatives and assigns.
 
8.           Severability.  If any provision of this Agreement shall be held by
any court of competent jurisdiction to be illegal, void or unenforceable, such
provision shall be of no force and effect.  The illegality or unenforceability
of such provision, however, shall have no effect upon and shall not impair the
enforceability of any other provision of this Agreement.
 
9.           Non-Disparagement.
 
(a)            You agree that you will make no disparaging or defamatory
comments regarding any member of the Company Group or their respective current
or former directors, officers or employees in any respect or make any
disparaging or defamatory comments concerning any aspect of your relationship
with any member of the Company Group or the conduct or events which precipitated
your termination of employment from any member of the Company Group.  Your
obligations under this paragraph 9 shall not apply to disclosures required by
applicable law, regulation or order of a court or governmental agency.
 
(b)            The Company agrees that, at all times hereafter, the Company will
not, and will instruct its directors and officers not to, make any disparaging
or defamatory remarks regarding you or any aspect of your relationship with any
member of the Company Group or any conduct or events which precipitated the
termination of your employment from any member of the Company Group.  However,
the Company’s obligations under this paragraph 9 shall not apply to disclosures
required by applicable law, regulation or order of a court or governmental
agency.
 
(c)            The parties hereto acknowledge and agree that the Company will
disclose the termination of your employment on Tuesday, January 22, 2013 in a
press release that is substantially similar to the press release attached hereto
as Exhibit A, it being understood that the Company shall be permitted to make
editorial changes to the bracketed paragraph of the press release to ensure its
factual accuracy.  Both you and the Company agree not to make any statements
regarding your termination of employment that are materially inconsistent with
the disclosure in the press release.
 
 
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10.           Cooperation.
 
(a)            You agree that you will provide reasonable cooperation to the
Company and/or any other member of the Company Group and its or their respective
counsel in connection with any investigation, administrative proceeding or
litigation relating to any matter that occurred during your employment in which
you were involved or of which you have knowledge.  To the extent that such
services are provided after the end of the Consulting Period, the Company shall
pay you at a rate of $1,000 per diem.  In addition, the Company agrees to
reimburse you for reasonable out-of-pocket expenses incurred at the request of
the Company with respect to your compliance with this paragraph.
 
(b)            You agree that, in the event you are 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 your employment by the Company and/or any other member of the
Company Group, you will give prompt notice of such request to Peter Woodward,
Chairman (or his/her successor or designee) and will make no disclosure until
the Company and/or the other member of the Company Group have had a reasonable
opportunity to contest the right of the requesting person or entity to such
disclosure.
 
11.           Confidential Information and Non-Solicitation.  By signing below,
you acknowledge and agree that the covenants set forth in Paragraph 7 of the
Employment Agreement remain in full force and effect and that you remain subject
to the terms and conditions set forth therein, including, without limitation,
the nonsolicitation covenants set forth therein.
 
12.           Return of Property.  Except as provided below, you agree that you
will promptly return to the Company all property belonging to the Company and/or
any other member of the Company Group, including but not limited to all
proprietary and/or confidential information and documents (including any copies
thereof) in any form belonging to the Company, cell phone, Blackberry, beeper,
keys, card access to the building and office floors, Employee Handbook, phone
card, computer user name and password, disks and/or voicemail code.  You further
acknowledge and agree that the Company shall have no obligation to provide the
Consideration referred to in paragraph 1 above unless and until you have
satisfied all your obligations pursuant to this paragraph.  Notwithstanding the
foregoing, you shall be entitled to retain your laptop computer following the
Termination Date; provided, that you hereby certify that the laptop does not, to
the best of your knowledge, contain any Confidential Information (as defined in
the Employment Agreement), and, to the extent that such laptop is later found to
contain any Confidential Information, you will not use any such information for
profit or in any manner that may harm the Company (including without limitation
financial harm) and shall promptly delete any such information promptly
following its discovery.
 
 
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13.           Prevailing Party.  In the event that any dispute between you and
the Company regarding any matter contemplated by this Agreement should result in
litigation or arbitration, the prevailing party in such dispute will be entitled
to recover from the other party all reasonable fees, costs and expenses of
enforcing any right of the prevailing party, including, without limitation,
reasonable attorneys’ fees and expenses.
 
14.           Non-Admission.  Nothing contained in this Agreement will be deemed
or construed as an admission of wrongdoing or liability on the part of you or
any member of the Company Group.
 
15.           Entire Agreement.  This Agreement constitutes the entire
understanding and agreement of the parties hereto regarding the termination of
your employment.  This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements between the
parties relating to the subject matter of this Agreement.
 
16.           Governing Law; Jurisdiction.  EXCEPT WHERE PREEMPTED BY FEDERAL
LAW, THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
FEDERAL LAW AND THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THAT STATE.
 
17.           Forum.  If the dispute is not resolved through negotiation within
three (3) days after written notice of such dispute by one party hereto to the
other party hereto, the parties hereto agree to attempt in good faith to settle
the dispute by mediation administered by JAMS in Manhattan, New York with a
single mediator.  If the parties hereto are unsuccessful at resolving the
dispute through mediation, the parties agree to binding arbitration administered
by JAMS in Manhattan, New York with a single arbitrator.  Judgment on the
arbitration award may be entered in any court having jurisdiction.  If the
parties fail to agree upon a mediator/arbitrator within three (3) days, then
JAMS shall furnish a list of potential mediators/arbitrators and each party
shall rank each person and return the lists to JAMS, which shall select the
person with the highest joint ranking as the mediator/arbitrator.
 
*           *           *
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth below.
 

 
HAMPSHIRE GROUP, LIMITED
                   
By:
/s/ Peter Woodward     Name: Peter Woodward     Title: Chairman                
    HEATH L. GOLDEN                     /s/ Heath L. Golden     Heath L. Golden
          Dated: January 18, 2013  

 
 
 

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EXHIBIT A
 
PRESS RELEASE
 

[logo1.jpg]

HAMPSHIRE ANNOUNCES RESIGNATION OF HEATH GOLDEN;
APPOINTS PAUL BUXBAUM AS CEO

-- HERBERT ELISH TO RETIRE FROM BOARD OF DIRECTORS --
-- COMPANY COMMENTS ON 2012 --

New York, NY – January 22, 2013 – Hampshire Group, Limited (OTC Markets: HAMP),
a leading provider of sportswear, today announced that Heath Golden has resigned
as President and Chief Executive Officer. Effective with his resignation, Mr.
Golden will also step down from his position as a Director on the Company’s
Board. The Board has appointed current board member, Mr. Paul Buxbaum, to serve
as Hampshire Group’s CEO.  Mr. Golden has agreed to remain as a consultant to
the Company to assist with certain transitional matters.

“Heath Golden has overseen Hampshire through a difficult period in its history
and led a transformation of our business, resulting in a Company with prospects
of growth and profitability.  On a personal level, we wish him the best,” said
Peter Woodward, Chairman of the Board of Directors.

Mr. Buxbaum, 57, joined Hampshire Group in 2011 after the Company’s acquisition
of Rio Garment.  Personally and through his firm, the Buxbaum Group, Mr. Buxbaum
has extensive experience leading consumer product and apparel companies.  Most
recently, he was Chief Executive Officer and Board Member of Haggar Clothing
Company.

Mr. Golden stated, “At this point in time, I believe the Company is well
positioned for profitable growth and that Paul Buxbaum has the skills required
to drive operational execution.  The Company is fortunate to have an experienced
apparel operator as a member of its Board of Directors and a significant
shareholder.  I depart knowing that the company is in capable hands and look
forward to observing its continued growth.”

Additionally, the Company announced the retirement of long-time board member,
Mr. Herbert Elish.

“Having served as a member of the Hampshire Group Board of Directors from 1986
to 2000 and again since 2005, Mr. Elish has served the Company through both
strong and challenging times and we are grateful for the dedication and
experience he brought to the Board,” Mr. Woodward concluded.

Concerning 2012 financial results, the Company believes that it will be
profitable on an adjusted EBITDA basis for the fourth quarter and second half of
2012, although not to levels previously stated.  The full financial results of
the Company for 2012 will be released in March, 2013.

 
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About Hampshire Group

Hampshire Group, Limited, (www.hamp.com) along with its wholly-owned
subsidiaries, Hampshire Brands, Inc., Rio Garment S.A. and scott james, LLC, is
a provider of fashion apparel across a broad range of product categories,
channels of distribution and price points. The Company specializes in designing
and marketing men’s sportswear to department stores, chain stores and mass
market retailers under licensed brands, our own proprietary brands and the
private labels of our customers. The Company operates a Honduras-based apparel
manufacturer, designing, sourcing and manufacturing knit tops for men, women and
children. The Company also offers a full sportswear collection for men through
the scott james® brand that is sold primarily at upscale department and
specialty stores and online at www.scottjamesonline.com.

CONTACTS

Investors:
MBS Value Partners
Gentra Cartwright/Betsy Brod
(212) 750-5800

Media:
Berns Communications Group
Jessica Liddell/Melissa Jaffin
212-994-4660

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