**Exhibit 10.48**

 

**AMENDED AND RESTATED EMPLOYMENTAGREEMENT**

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “**Agreement**”),dated as of October 13, 2010 (the “**Effective Date**”),between Rafaella Apparel Group, Inc. (the “**Company**”)and Richard Metzger (the “**Executive**”, andtogether with the Company, the “**Parties**”).

 

WHEREAS,the Executive is currently employed by the Company pursuant to the terms of aletter agreement between the Company and the Executive, dated as of September 12,2007 (the “**Prior Agreement**”); and

 

WHEREAS,the Company desires to amend and restate the terms of the Prior Agreement andthe Executive wishes to continue his employment with the Company on the termsand conditions set forth herein.

 

NOW,THEREFORE, in consideration of the premises and mutual agreements hereinaftercontained, the Parties hereto agree as follows:

 

1.             Term.  This Agreement and the employmentrelationship hereunder shall commence on the Effective Date and continue untilthe Executive’s employment terminates in accordance with Section 4.  As used in this Agreement, the “**Term**” shall refer to the period beginning on the EffectiveDate and ending on the date the Executive’s employment terminates in accordancewith Section 4.  In the eventthat the Executive’s employment with the Company terminates, the Company’sobligation to continue to pay all base salary, as adjusted, bonus and otherbenefits then accrued shall terminate except as may be provided for in Section 5.

 

2.             Duties andTitle.

 

2.1           Title.  The Company shall employ the Executive torender exclusive and full-time services to the Company and itssubsidiaries.  The Executive shall servein the capacity of Executive Vice-President of Design of the Company and shallreport to the Chief Executive Officer of the Company (the “**CEO**”)or any other executive officer of the Company as may be directed by the CEO orthe Board of Directors of the Company (the “**Board**”).

 

2.2           Duties.  The Executive will have such authority andresponsibilities and will perform such duties customarily performed by anexecutive vice-president of design of a company in similar lines of business asthe Company and its subsidiaries or as may be assigned to the Executive by theCEO.  The Executive will devote all hisfull working-time and attention to the performance of such duties and to thepromotion of the business and interests of the Company and its subsidiaries; provided,that the Executive may engage in philanthropic activities and passiveinvestment activities as long as such activities do not conflict with ormaterially interfere with the performance of his duties, as reasonablydetermined by the Board.

 

3.             Compensationand Benefits by the Company.  As compensation for all services performed bythe Executive for the Company and its subsidiaries, the Company shall providethe Executive the following during the Term:

 

----

 

3.1           Base Salary.  The Company will pay to the Executive anannual base salary of $375,000, payable in accordance with the customarypayroll practices of the Company (“**Base Salary**”).  The then current Base Salary shall bereviewed annually.

 

3.2           Bonuses.  The Executive will be eligible to receive anannual bonus (“**Bonus**”) based on annual pre-taxprofits under a plan established by the Company.  The Executive’s target bonus shall be fiftypercent (50%) of Base Salary, with the actual amount of each Bonus beingdetermined as provided under such plan. For any partial fiscal years, the Bonus will be prorated based on thenumber of days of actual employment during a three hundred and sixty five (365)-dayfiscal year.  The Bonus will be paid on September 30thof the Company’s immediately subsequent fiscal year in which the servicesrequired for payment have been performed.

 

3.3           Participation in EmployeeBenefit Plans.  TheExecutive shall be entitled, if and to the extent eligible, to participate inall of the applicable benefit plans of the Company that are available to othersenior executives of the Company, on terms which are at least as favorable asthe terms for other senior executives. The Company may at any time or from time to time amend, modify, suspendor terminate any employee benefit plan, program or arrangement for any reasonwithout the Executive’s consent if such amendment, modification, suspension ortermination is consistent with the amendment, modification, suspension ortermination for other executives of the Company.

 

3.4           Vacation.  The Executive shall be entitled to a paidvacation schedule on terms at least as favorable as for other executives of theCompany; provided, however that such vacation shall be a minimum of four(4) weeks of paid vacation annually. Vacation carry-over policy shall be the same terms as those enforced forother executives of the Company.

 

3.5           Expense Reimbursement.  The Executive shall be entitled to receivereimbursement for all appropriate business expenses incurred by him inconnection with his duties under this Agreement in accordance with the policiesof the Company as in effect from time to time.

 

3.6           Equity Grant.  The Executive shall be eligible toparticipate in the Company’s Equity Incentive Plan (the “**EquityIncentive Plan**”).  TheExecutive shall receive an equity grant to be determined by the Boardsubsequent to the execution hereof.  Theequity award shall be subject to the terms and conditions of the EquityIncentive Plan and the Company’s customary documentation with respect thereto.

 

4.             Termination ofEmployment.

 

4.1           Due to Death of theExecutive.  TheExecutive’s employment shall terminate immediately upon his death.

 

4.2           Due to Disability of theExecutive.  TheExecutive’s employment shall terminate upon the Executive’s “Disability.”  For the purposes of this Agreement, “**Disability**” means a determination by the Company inaccordance with applicable law that as a result of a physical or mental injuryor illness, the Executive is unable to perform the essential functions of hisjob with or without reasonable accommodation for a period of ninety (90)consecutive days in any three hundred and sixty (360)-day period.

 

2

----

 

4.3           By the Company.  The Company may terminate the Executive’semployment at any time during the Term with or without “Cause,” upon writtennotice by the Company to the Executive, and the Executive’s employment willterminate on the date specified in such written notice.

 

For the purposes of this Agreement, “**Cause**”means (i) commission of a felony by the Executive or embezzlement from theCompany; (ii) other acts of dishonesty by the Executive resulting orintending to result in personal gain or enrichment at the expense of theCompany or its subsidiaries; (iii) the Executive’s material breach of hisobligations under this Agreement; (iv) conduct by the Executive inconnection with his duties hereunder that is fraudulent, unlawful or grosslynegligent, including, but not limited to, acts of discrimination; (v) engagingin personal conduct by the Executive (including but not limited to employeeharassment or discrimination, the use or possession at work of any illegalcontrolled substance) which seriously discredits or damages the Company or itssubsidiaries; (vi) contravention of specific lawful direction from the CEO(or from any other executive officer of the Company to who the Executivereports) or continuing inattention to or continuing failure to adequatelyperform the duties to be performed by the Executive under the terms of Section 2.2;or (vii) breach of the Executive’s covenants set forth in Section 6below before termination of employment; provided, that solely withrespect to sub-clauses (iii) and (vi) immediately preceding, theExecutive shall have fifteen (15) days after notice from the Company to curethe deficiency (if such deficiency is curable) leading to any suchdetermination of Cause.  A terminationfor “Cause” shall be effective immediately (or on such other date set forth bythe Company).

 

4.4           By the Executive.  The Executive may terminate his employmentwith the Company at any time during the Term for any reason, upon thirty (30)days written notice by the Executive to the Company.

 

4.5           Automatic Termination ofOther Positions.  Upon theExecutive no longer being employed by the Company for any reason whatsoever,the Executive shall automatically be deemed to have resigned as an officer anddirector of all subsidiaries of the Company without any further action beingrequired by the Executive, the Company or any subsidiary of the Company.

 

5.             SeverancePayment.

 

5.1           By the Company for Cause orby the Executive for any reason or Due to Death or Disability.  If: (i) the Executive’s employmentterminates due to his death; (ii) the Company terminates the Executive’semployment with the Company for Cause; (iii) the Company terminates theExecutive’s employment with the Company due to the Executive’s Disability; or (iv) theExecutive terminates his employment for any reason, then the Executive or theExecutive’s legal representatives (as appropriate), shall be entitled toreceive the following:

 

(a)           the Executive’s accrued butunpaid Base Salary, if any, to the date of termination, payable within thirty(30) days after the termination of the Executive’s employment;

 

3

----

 

(b)           the unpaid portion of theBonus, if any, relating to the fiscal year immediately prior to the fiscal yearof the Executive’s death, Disability, resignation or termination by the Companyfor Cause payable in accordance with Section 3.2;

 

(c)           expenses reimbursable under Section 3.5incurred but not yet reimbursed to the Executive to the date of termination,payable within thirty (30) days after the termination of the Executive’semployment; and

 

(d)           any rights the Executive mayhave under the Company’s benefit plans and the Consolidated Omnibus BudgetReconciliation Act.

 

5.2           By the Company Without Cause.  If during the Term the Company terminates theExecutive’s employment without Cause (which may be done at any time withoutprior notice), then, in addition to the payments upon termination specified in Section 5.1,the Executive shall receive, upon execution without revocation of a validrelease agreement in a form acceptable to the Company, continued payment ofBase Salary for a period of six (6) months following the date oftermination.

 

6.             Restrictionsand Obligations of the Executive.

 

6.1           Confidentiality.

 

(a)           During the course of theExecutive’s service relationship with the Company and its affiliates, theExecutive will****have access to certain tradesecrets and confidential information relating to the Company and itssubsidiaries (the “**Protected Parties**”)which is not readily available from sources outside the Company.  The confidential and proprietary informationand trade secrets of the Protected Parties are among their most valuableassets, including but not limited to, their customer, supplier and vendor lists,databases, competitive strategies, computer programs, frameworks, or models,their marketing programs, their sales, financial, marketing, training andtechnical information, their product development (and proprietary product data)and any other information, whether communicated orally, electronically, inwriting or in other tangible forms concerning how the Protected Parties create,develop, acquire or maintain their products and marketing plans, target theirpotential customers and operate their retail and other businesses.  The Protected Parties invested, and continueto invest, considerable amounts of time and money in their process, technology,know-how, obtaining and developing the goodwill of their customers, their otherexternal relationships, their data systems and data bases, and all theinformation described above (hereinafter collectively referred to as “**Confidential Information**”), and any misappropriation orunauthorized disclosure of Confidential Information in any form wouldirreparably harm the Protected Parties. The Executive acknowledges that such Confidential Informationconstitutes valuable, highly confidential, special and unique property of theProtected Parties.  The Executive shallhold in a fiduciary capacity for the benefit of the Protected Parties allConfidential Information relating to the Protected Parties and theirbusinesses, which shall have been obtained by the Executive during theExecutive’s employment by the Company or its subsidiaries and which shall notbe or become public knowledge (other than by acts by the Executive orrepresentatives of the Executive in violation of this 

 

4

----

 

Agreement).  Except as required by law or an order of acourt or governmental agency with jurisdiction or a subpoena or other legalprocess, the Executive shall not, during the period the Executive is employedby the Company or its subsidiaries or at any time thereafter, disclose anyConfidential Information, directly or indirectly, to any person or entity forany reason or purpose whatsoever, nor shall the Executive use it in any way,except in the course of the Executive’s employment with, and for the benefitof, the Protected Parties or to enforce any rights or defend any claimshereunder or under any other agreement to which the Executive is a party; provided,that such disclosure is relevant to the enforcement of such rights or defenseof such claims and is only disclosed in the formal proceedings relatedthereto.  The Executive shall take allreasonable steps to safeguard the Confidential Information and to protect itagainst disclosure, misuse, espionage, loss and theft.  The Executive understands and agrees that theExecutive shall acquire no rights to any such Confidential Information.

 

(b)           All files, records, documents, drawings,specifications, data, computer programs, evaluation mechanisms and analyticsand similar items relating thereto or to the Business (for the purposes of thisAgreement, “**Business**” shall be as defined in Section 6.3),as well as all customer lists, specific customer information, compilations ofproduct research and marketing techniques of the Company and its subsidiaries,whether prepared by the Executive or otherwise coming into the Executive’spossession, shall remain the exclusive property of the Company and itssubsidiaries, and the Executive shall not remove any such items from thepremises of the Company and its subsidiaries, except in furtherance of theExecutive’s duties under any employment agreement.

 

(c)           It is understood that while employed by the Companyor its subsidiaries, the Executive will promptly disclose to it, and assign toit the Executive’s interest in any invention, improvement or discovery made orconceived by the Executive, either alone or jointly with others, which arisesout of the Executive’s employment.  Atthe Company’s request and expense, the Executive will assist the Company andits subsidiaries during the period of the Executive’s employment by the Companyor its subsidiaries and thereafter in connection with any controversy or legalproceeding relating to such invention, improvement or discovery and inobtaining domestic and foreign patent or other protection covering the same.

 

(d)           As requested by the Company and at the Company’sexpense, from time to time and upon the termination of the Executive’semployment with the Company for any reason, the Executive will promptly deliverto the Company and its subsidiaries all copies and embodiments, in whateverform, of all Confidential Information in the Executive’s possession or withinhis control (including, but not limited to, memoranda, records, notes, plans,photographs, manuals, notebooks, documentation, program listings, flow charts,magnetic media, disks, diskettes, tapes and all other materials containing anyConfidential Information) irrespective of the location or form of suchmaterial.  If requested by the Company,the Executive will provide the Company with written confirmation that all suchmaterials have been delivered to the Company as provided herein.

 

5

----

 

6.2           Non-Solicitation or Hire.  During the Term and for aperiod of six (6) months following the termination of the Executive’semployment for any reason, the Executive shall not, directly or indirectly (i) solicitor attempt to solicit or induce, directly or indirectly, any party who is acustomer of the Company or its subsidiaries, or who was a customer of theCompany or its subsidiaries at any time during the twelve (12) month periodimmediately prior to the date the Executive’s employment terminates, for thepurpose of marketing, selling or providing to any such party any services orproducts offered by or available from the Company or its subsidiaries (orservices or products that were contemplated or planned to be offered by theCompany or any of its subsidiaries during the Term of the Executive’semployment), (b) solicit or attempt to solicit or induce, directly orindirectly, any supplier to the Company or any subsidiary to terminate, reduceor alter negatively its relationship with the Company or any subsidiary or inany manner interfere with any agreement or contract between the Company or anysubsidiary and such supplier, (c) hire, directly or indirectly, anyemployee of the Company or any of its subsidiaries or any person who was anemployee of the Company or any of its subsidiaries during the twelve (12) monthperiod immediately prior to the date the Executive’s employment terminates, or (d) solicitor attempt to solicit, directly or indirectly, any person who was an employeeof the Company or any of its subsidiaries or any person who was an employee ofthe Company or any of its subsidiaries during the twelve (12) month periodimmediately prior to the date the termination of the Executive’s employment, toterminate such employee’s employment relationship and/or to enter into asimilar relationship with the Executive, or any other person or any otherperson or entity.

 

6.3           Non-Competition.  During the Term and for a period of six (6) monthsfollowing the termination of the Executive’s employment by the Company (for anyreason), the Executive shall not, whether individually, as a director, manager,member, stockholder, partner, owner, employee, consultant or agent of anybusiness, or in any other capacity, other than on behalf of the Company or asubsidiary, organize, establish, own, operate, manage, control, engage in,participate in, invest in, permit his name to be used by, act as a consultantor advisor to, render services for (alone or in association with any person,firm, corporation or business organization), or otherwise assist any person orentity that engages in or owns, invests in, operates, manages or controls anyventure or enterprise which engages or proposes to engage in the women’s careerand casual separates clothing business in the geographic locations where theCompany and its subsidiaries engage or propose to engage in such business (the “**Business**”). Notwithstanding the foregoing, nothing in this Agreement shall preventthe Executive from owning for passive investment purposes not intended tocircumvent this Agreement, less than five percent (5%) of the publicly tradedcommon equity securities of any company engaged in the Business (so long as theExecutive has no power to manage, operate, advise, consult with or control thecompeting enterprise and no power, alone or in conjunction with otheraffiliated parties, to select a director, manager, general partner, or similargoverning official of the competing enterprise other than in connection withthe normal and customary voting powers afforded the Executive in connectionwith any permissible equity ownership).

 

6.4           Property.  The Executive acknowledges that all originalsand copies of materials, records and documents generated by him or coming intohis possession during his employment by the Company or its subsidiaries are thesole property of the Company and its subsidiaries (“**CompanyProperty**”).  During the Term,and at all times thereafter, the Executive shall not remove, or cause to beremoved, from the premises of the Company or its subsidiaries, copies of 

 

6

----

 

any record, file, memorandum, document, computerrelated information or equipment, or any other item relating to the business ofthe Company or its subsidiaries, except in furtherance of his duties under thisAgreement.  When the Executive’semployment with the Company terminates, or upon request of the Company at anytime, the Executive shall promptly deliver to the Company all copies of CompanyProperty in his possession or control.

 

7.             Nondisparagement.  The Executive agrees that he will not at anytime (whether during or after the Term) publish or communicate to any person orentity any Disparaging (as defined below) remarks, comments or statementsconcerning the Company, Cerberus Capital Management, L.P., their parents,subsidiaries and affiliates, and their respective present and former members,partners, directors, officers, shareholders, employees, agents, attorneys,successors and assigns.  “**Disparaging**” remarks, comments or statements are those thatimpugn the character, honesty, integrity or morality or business acumen orabilities in connection with any aspect of the operation of business of theindividual or entity being disparaged.

 

8.             Remedies; SpecificPerformance.  The Partiesacknowledge and agree that the Executive’s breach or threatened breach of anyof the restrictions set forth in Section 6 and Section 7will result in irreparable and continuing damage to the Protected Parties forwhich there may be no adequate remedy at law and that the Protected Partiesshall be entitled to equitable relief, including specific performance andinjunctive relief as remedies for any such breach or threatened or attemptedbreach without the necessity of the posting of a bond or surety therefor.  The Executive hereby consents to the grantingof equitable relief, including but limited to the granting of injunctive relief(temporary or otherwise) against the Executive or the entry of any other courtorder against the Executive prohibiting and enjoining him from violating, ordirecting him to comply with any provision of Section 6 or Section 7.  The Executive also agrees that such remediesshall be in addition to any and all remedies, including damages, available tothe Protected Parties against him for such breaches or threatened or attemptedbreaches.  In addition, without limitingthe Protected Parties’ remedies for any breach of any restriction on theExecutive set forth in Section 6 or Section 7, exceptas required by law, the Executive shall not be entitled to any payments setforth in Section 5.2 hereof if the Executive has breached thecovenants applicable to the Executive contained in Section 6 or Section 7,the Executive will immediately return to the Protected Parties any suchpayments previously received under Section 5.2 upon such a breach,and, in the event of such breach, the Protected Parties will have no obligationto pay any of the amounts that remain payable by the Company under Section 5.2.

 

9.             Indemnification. The Companyagrees, to the extent permitted by applicable law and its organizationaldocuments, to indemnify, defend and hold harmless the Executive from andagainst any and all losses, suits, actions, causes of action, judgments,damages, liabilities, penalties, fines, costs or claims of any kind or nature (“**Indemnified Claim**”), including reasonable legal fees andrelated costs incurred by the Executive in connection with the preparation foror defense of any Indemnified Claim, whether or not resulting in any liability,to which the Executive may become subject or liable or which may beincurred by or assessed against the Executive, relating to or arising out ofhis employment by the Company or the services to be performed pursuant to thisAgreement; provided, that the Company shall only defend, but notindemnify or hold the Executive harmless, from and against an Indemnified Claimin the event there is a final, non-appealable, determination that the Executive’sliability with respect to such Indemnified Claim resulted from the Executive’swillful misconduct or gross 

 

7

----

 

negligence.The Company’s obligations under this Section shall be in addition to anyother right, remedy or indemnification which the Executive may have or beentitled to at common law or otherwise.

 

10.**          **OtherProvisions.

 

10.1         Notices.  Any notice or other communication required orwhich may be given hereunder shall be in writing and shall be deliveredpersonally, sent by facsimile transmission or sent by certified, registered orexpress mail, postage prepaid or overnight mail and shall be deemed given whenso delivered personally, or sent by facsimile transmission or, if mailed, four (4) daysafter the date of mailing or one (1) day after overnight mail, as follows:

 

(a)           If the Company, to:

 

Rafaella Apparel Group, Inc.

1411 Broadway

New York, New York 10018

Attention:  Secretary

Telephone:  (212) 403-0300

Fax:  (212) 764-9275

 

(b)           If the Executive, to theExecutive’s home address reflected in the Company’s records.

 

10.2         Entire Agreement.  This Agreement contains the entire agreementbetween the Parties with respect to the subject matter hereof and supersedesall prior agreements, written or oral, with respect thereto, including, but notlimited to the Prior Agreement.

 

10.3         Representations andWarranties by the Executive.  The Executive represents and warrants that heis not a party to or subject to any restrictive covenants, legal restrictionsor other agreements in favor of any entity or person which would in any waypreclude, inhibit, impair or limit the Executive’s ability to perform hisobligations under this Agreement, including, but not limited to,non-competition agreements, non-solicitation agreements or confidentialityagreements.

 

10.4         Waiver and Amendments.  This Agreement may be amended, modified,superseded, canceled, renewed or extended, and the terms and conditions hereofmay be waived, only by a written instrument signed by the Parties or, in thecase of a waiver, by the party waiving compliance.  No delay on the part of any party inexercising any right, power or privilege hereunder shall operate as a waiverthereof, nor shall any waiver on the part of any right, power or privilegehereunder, nor any single or partial exercise of any right, power or privilegehereunder, preclude any other or further exercise thereof or the exercise ofany other right, power or privilege hereunder.

 

8

----

 

10.5         Governing Law, DisputeResolution and Venue.

 

(a)           This Agreement shall begoverned and construed in accordance with the laws of the State of New Yorkapplicable to agreements made and not to be performed entirely within suchstate, without regard to conflicts of laws principles.

 

(b)           The parties agreeirrevocably to submit to the exclusive jurisdiction of the federal courts or,if no federal jurisdiction exists, the state courts, located in the City of NewYork, Borough of Manhattan, for the purposes of any suit, action or otherproceeding brought by any party arising out of any breach of any of theprovisions of this Agreement and hereby waive, and agree not to assert by wayof motion, as a defense or otherwise, in any such suit, action, or proceeding,any claim that it is not personally subject to the jurisdiction of theabove-named courts, that the suit, action or proceeding is brought in aninconvenient forum, that the venue of the suit, action or proceeding isimproper, or that the provisions of this Agreement may not be enforced in or bysuch courts.  In addition, the partiesagree to the waiver of a jury trial.

 

10.6         Assignability by the Companyand the Executive.  ThisAgreement, and the rights and obligations hereunder, may not be assigned by theCompany or the Executive without written consent signed by the other party; provided,that the Company may assign this Agreement to any successor that continues thebusiness of the Company.

 

10.7         Counterparts.  This Agreement may be executed in one or moreoriginal, facsimile or electronic counterparts, each of which shall be deemedan original but all of which shall constitute one and the same instrument.

 

10.8         Headings.  The headings in this Agreement are forconvenience of reference only and shall not limit or otherwise affect themeaning of terms contained herein.

 

10.9         Severability.  If any term, provision, covenant orrestriction of this Agreement, or any part thereof, is held by a court ofcompetent jurisdiction of any foreign, federal, state, county or localgovernment or any other governmental, regulatory or administrative agency orauthority to be invalid, void, unenforceable or against public policy for anyreason, the remainder of the terms, provisions, covenants and restrictions of thisAgreement shall remain in full force and effect and shall in no way be affectedor impaired or invalidated.  TheExecutive acknowledges that the restrictive covenants contained in Section 6and Section 7 constitute a condition to the Company’s entry intothis Agreement and are reasonable and valid in temporal scope and in all otherrespects.

 

10.10       Judicial Modification.  If any court determines that any of thecovenants in Section 6 or Section 7, or any part of anyof them, is invalid or unenforceable, the remainder of such covenants and partsthereof shall not thereby be affected and shall be given full effect, withoutregard to the invalid portion.  If anycourt determines that any of such covenants, or any part thereof, is invalid orunenforceable because of the geographic or temporal scope of such provision,such court shall reduce such scope to the minimum extent necessary to make suchcovenants valid and enforceable.

 

9

----

 

10.11       Tax Withholding.  The Company or other payor is authorized towithhold from any benefit provided or payment due hereunder, the amount ofwithholding taxes due any federal, state or local authority in respect of suchbenefit or payment and to take such other action as may be necessary in theopinion of the Board to satisfy all obligations for the payment of suchwithholding taxes.

 

[REMAINDER OF PAGEINTENTIONALLY LEFT BLANK]

 

10

----

 

IN WITNESS WHEREOF, the Parties hereto, intending tobe legally bound hereby, have executed this Amended and Restated EmploymentAgreement as of the day and year first above mentioned.

 

 
|   | **EXECUTIVE**                          |
|--------|----------------------------------------|
|   |                                   |
|   |                                   |
|   | /s/  Richard Metzger                   |
|   | Richard  Metzger                       |
|   |                                   |
|   |                                   |
|   | **RAFAELLA  APPAREL GROUP, INC.** |
|   |                                   |
|   |                                   |
|   | By:                                    | /s/  Christa Michalaros |
|   |                                   | Name:  Christa Michalaros |
|   |                                   | Title:  Chief Executive Officer |

 

----