Document:

ex10-1.htm

EXHIBIT 10.1

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement, dated as of August 25, 2011 is made by and between Hampshire Group, Limited, a Delaware corporation (the “Company”), and David Gren (the “Indemnitee”).

 

RECITALS

 

A.           The Company recognizes that competent and experienced persons are increasingly reluctant to serve or to continue to serve as directors and officers of corporations unless they are protected by comprehensive liability insurance or indemnification, or both, due to increased exposure to litigation costs and risks resulting from their service to such corporations, and due to the fact that the exposure frequently bears no reasonable relationship to the compensation of such directors.

 

B.           The Company’s Certificate of Incorporation and Bylaws require the Company to indemnify its directors and officers to the fullest extent permitted by the Delaware General Corporate Law (the “DGCL”).  The Certificate of Incorporation expressly provides that the indemnification provisions set forth therein are not exclusive, and contemplates that contracts may be entered into between the Company and its directors and officers with respect to indemnification.

 

C.           Section 145 of the DGCL, under which the Company is organized, empowers the Company to indemnify its officers, directors, employees and agents by agreement and to indemnify persons who serve, at the request of the Company, as the directors, officers, employees or agents of other corporations or enterprises, and expressly provides that the indemnification provided by Section 145 is not exclusive.

 

D.           The Board of Directors has determined that contractual indemnification as set forth herein is not only reasonable and prudent but also promotes the best interests of the Company and its stockholders.

 

E.           The Indemnitee has been requested by the Company to serve, inter alia, as the President and General Manager of Hampshire International, LLC, a Delaware limited liability company, and Rio Garment S. de R.L., a limited liability company organized under the Laws of the Republic of Honduras.

 

F.           In connection with Indemnitee’s service as an officer of the Company, the Company and Indemnitee agree that the Company will furnish Indemnitee the indemnity provided for herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

Section 1.                      Generally.

 

To the fullest extent permitted by the laws of the State of Delaware:

 

(a)           The Company shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that Indemnitee is or was or has agreed to serve at the request of the Company as a director, officer, employee or agent of the Company or, while serving as a director or officer of the Company, is or was serving or has agreed to serve at the request of the Company as a director, officer, trustee, employee or agent of or in any other capacity with another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity.

 

(b)           The indemnification provided by this Section 1 shall be from and against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such action, suit or proceeding and any appeal therefrom, but shall only be provided if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action, suit or proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful.

 

(c)           Notwithstanding the foregoing provisions of this Section 1, in the case of any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Company, or while serving as a director or officer of the Company, is or was serving or has agreed to serve at the request of the Company as a director, officer, trustee, employee or agent of or in any other capacity with another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise (including, without limitation, the Derivative Suit), no indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Company unless, and only to the extent that, the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

 

(d)           The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

Section 2.                      Successful Defense; Partial Indemnification. To the extent that Indemnitee has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 1 hereof or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred in connection therewith. For purposes of  this Agreement and without limiting the foregoing, if any action, suit or proceeding is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee was liable to the Company, (iii) a plea of guilty or nolo contendere by Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, or (v) with respect to any criminal proceeding, an adjudication that Indemnitee had reasonable cause to believe Indemnitee’s conduct was unlawful, Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect thereto.

 

If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any action, suit, proceeding or investigation, or in defense of any claim, issue or matter therein, and any appeal therefrom but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement to which Indemnitee is entitled.

 

Section 3.                      Determination That Indemnification Is Proper.  Any indemnification hereunder shall (unless otherwise ordered by a court) be made by the Company unless a determination is made that indemnification of such person is not proper in the circumstances because he or she has not met the applicable standard of conduct set forth in Section 1(b) hereof.  Any such determination shall be made by one of the following methods, at the election of Indemnitee: (i) by a majority vote of the directors who are not parties to the action, suit or proceeding in question (“disinterested directors”), even if less than a quorum, (ii) by a majority vote of a committee of disinterested directors designated by majority vote of disinterested directors, even if less than a quorum, (iii) by a majority vote of a quorum of the outstanding shares of stock of all classes entitled to vote on the matter, voting as a single class, which quorum shall consist of stockholders who are not at that time parties to the action, suit or proceeding in question, (iv) by independent legal counsel mutually agreed upon by the Company and Indemnitee in a written opinion addressed to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (v) by a court of competent jurisdiction.  Indemnitee shall cooperate with reasonable requests of the persons making such standard of conduct determination, including providing to such persons documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination without incurring any unreimbursed cost in connection therewith.  The Company shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five business days of such request accompanied by supporting documentation for specific costs and expenses to be reimbursed or advanced, any and all costs and expenses (including attorneys’ and experts’ fees and expenses) incurred by Indemnitee in connection with making this standard of conduct determination.

 

Section 4.                      Advance Payment of Expenses; Notification and Defense of Claim.

 

(a)           Expenses (including attorneys’ fees) incurred by Indemnitee in defending a threatened or pending civil, criminal, administrative or investigative action, suit or proceeding, or in connection with an enforcement action pursuant to Section 5(b), shall be paid by the Company in advance of the final disposition of such action, suit or proceeding within five business days after receipt by the Company of (i) a statement or statements from Indemnitee requesting such advance or advances from time to time, and (ii) an undertaking by or on behalf of Indemnitee to repay such amount or amounts, only if, and to the extent that, it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Company as authorized by this Agreement or otherwise.  Such undertaking shall be accepted without reference to the financial ability of Indemnitee to make such repayment.  Advances shall be unsecured and interest-free.  Without limiting the generality or effect of the foregoing, the Company shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five business days of such request accompanied by supporting documentation for specific expenses to be reimbursed or advanced, any and all expenses paid or incurred by Indemnitee or which Indemnitee determines in good faith are reasonably likely to be paid or incurred by Indemnitee in connection with any claim made, instituted or conducted by Indemnitee for (x) indemnification or reimbursement or advance payment of expenses by the Company under any provision of this Agreement, the Certificate of Incorporation, or the Bylaws, and (y) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless in each case of whether Indemnitee ultimately is determined to be entitled to such indemnification, reimbursement, advance or insurance recovery, as the case may be; provided, however, that Indemnitee shall return, without interest, any such advance of expenses (or portion thereof) which remains unspent at the final disposition of the claim to which the advance related.

 

(b)           Promptly, and in any event within twenty business days, after receipt by Indemnitee of notice of the commencement of any action, suit or proceeding, Indemnitee shall, if a claim thereof is to be made against the Company hereunder, notify the Company of the commencement thereof.  The failure to notify the Company promptly and in any event within twenty business days of the commencement of the action, suit or proceeding, or Indemnitee’s request for indemnification, will not relieve the Company from any liability that it may have to Indemnitee hereunder, except to the extent the Company is prejudiced in its defense of such action, suit or proceeding as a result of such failure.

 

(c)           In the event the Company shall be obligated to pay the expenses of Indemnitee with respect to an action, suit or proceeding, as provided in this Agreement, the Company, if appropriate, shall be entitled to assume the defense of such action, suit or proceeding, with counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of its election to do so within twenty business days after the Company’s receipt of the notice of the commencement of an action, suit or proceeding provided by Indemnitee to the Company pursuant to Section 4(b) above.  After delivery of such notice, approval of such counsel by Indemnitee (which approval will not be unreasonably withheld) and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same action, suit or proceeding, provided that (1) Indemnitee shall have the right to employ Indemnitee’s own counsel in such action, suit or proceeding at Indemnitee’s expense and (2) if (i) the employment of counsel by Indemnitee has been previously authorized in writing by the Company or counsel has been employed by Indemnitee to advise and assist Indemnitee in connection with preparation for or participation in any SEC interviews or depositions, (ii) counsel to the Company or Indemnitee shall have reasonably concluded that there may be a conflict of interest or position, or reasonably believes that a conflict is likely to arise, on any significant issue between the Company and Indemnitee in the conduct of any such defense or (iii) the Company shall not, in fact, have employed counsel to assume the defense of such action, suit or proceeding (or fails to diligently conduct such defense), then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company, except as otherwise expressly provided by this Agreement.  The Company shall not be entitled, without the consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Company or as to which counsel for the Company or Indemnitee shall have reasonably made the conclusion provided for in clause (ii) above.

 

(d)           Notwithstanding any other provision of this Agreement to the contrary, to the extent that Indemnitee is, by reason of Indemnitee’s current, future or former corporate status with respect to the Company or any corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee is or was serving or has agreed to or may otherwise in the future serve at the request of the Company, a witness or otherwise participates in any action, suit or proceeding at a time when Indemnitee is not a party in the action, suit or proceeding, the Company shall indemnify Indemnitee against all expenses (including attorneys’ fees) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith (including, without limitation, fees and expenses of counsel employed by Indemnitee to advise and assist Indemnitee in connection with preparation for or participation in any SEC interviews or depositions).

 

Section 5.                      Procedure for Indemnification.

 

(a)           To obtain indemnification, Indemnitee shall promptly submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

 

(b)           The Company’s determination whether to grant Indemnitee’s indemnification request shall be made promptly, and in any event within 30 days following receipt of a request for indemnification pursuant to Section 5(a). The right to indemnification as granted by Section 1 of this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction if the Company denies such request, in whole or in part, or fails to respond within such 30-day period.  It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 4 hereof where the required undertaking, if any, has been received by the Company) that Indemnitee has not met the standard of conduct set forth in Section 1 hereof, but the burden of proving such defense by clear and convincing evidence shall be on the Company. Neither the failure of the Company (including its Board of Directors or one of its committees, its independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of conduct set forth in Section 1 hereof, nor the fact that there has been an actual determination by the Company (including its Board of Directors or one of its committees, its independent legal counsel, or its stockholders) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has or has not met the applicable standard of conduct.  The Indemnitee’s expenses (including attorneys’ fees) incurred in connection with successfully establishing Indemnitee’s right to indemnification, in whole or in part, in any such proceeding or otherwise shall also be indemnified by the Company.

 

(c)           The Indemnitee shall be presumed to be entitled to indemnification under this Agreement upon submission of a request for indemnification pursuant to this Section 5, and the Company shall have the burden of proof in overcoming that presumption in reaching a determination contrary to that presumption.  Such presumption shall be used as a basis for a determination of entitlement to indemnification unless the Company overcomes such presumption by clear and convincing evidence.

 

Section 6.                      Insurance and Subrogation.

 

(a)           For the duration of Indemnitee’s service as a director, officer, employee, or agent of the Company and for not less than six years thereafter or, if later, for so long as Indemnitee is subject to any possible action, suit or proceeding described in Section 1(a) above, the Company shall provide directors’ and officers’ liability insurance coverage for Indemnitee that is at least as favorable in scope and amount as that provided as of such time for the Company’s directors and other executive officers.  Upon request, the Company shall provide Indemnitee or his counsel with a copy of all directors’ and officers’ liability insurance applications, binders, policies, declarations, endorsements and other related materials.  In all policies of directors’ and officers’ liability insurance obtained by the Company, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits, subject to the same limitations, as are accorded to the Company’s directors and officers most favorably insured by such policy.

 

(b)           In the event of any payment by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with respect to any insurance policy, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights in accordance with the terms of such insurance policy. The Company shall pay or reimburse all expenses actually and reasonably incurred by Indemnitee in connection with such subrogation.

 

(c)           The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) if and to the extent that Indemnitee has otherwise actually received such payment under this Agreement or any insurance policy, contract, agreement or otherwise.

 

Section 7.                      Certain Definitions. For purposes of this Agreement, the following definitions shall apply:

 

(a)           The term “action, suit or proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative, including any inquiry, investigation, or examination, whether made, instituted, or conducted by the Company or any other person, including without limitation any federal, state or other governmental entity, that Indemnitee determines might lead to the institution of any such action, suit or proceeding.  For the avoidance of doubt, the Company intends indemnity to be provided hereunder in respect of acts or failure to act prior to, on, or after the date hereof.

 

(b)           The term “by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Company, or while serving as a director or officer of the Company, is or was serving or has agreed to serve at the request of the Company as a director, officer, employee or agent of or in any other capacity with another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise” shall be broadly construed and shall include, without limitation, any actual or alleged act or omission to act.

 

(c)           The term “expenses” shall be broadly and reasonably construed and shall include, without limitation, all direct and indirect costs of any type or nature whatsoever actually and reasonably incurred by Indemnitee in connection with either the investigation, defense or appeal of a proceeding (including serving as a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in (including on appeal), a proceeding, or establishing or enforcing a right to indemnification under this Agreement, Section 145 of the DGCL, or otherwise.  For the avoidance of doubt, the term “expenses” shall include, without limitation, all reasonable attorneys’ fees and related disbursements, appeal bonds, other out-of-pocket costs.

 

(d)           The term “judgments, fines and amounts paid in settlement” shall be broadly construed and shall include, without limitation, all direct and indirect payments of any type or nature whatsoever (including, without limitation, all penalties and amounts required to be forfeited or reimbursed to the Company), as well as any penalties or excise taxes assessed on a person with respect to an employee benefit plan).

 

(e)           The term “Company” shall include any of the Company’s subsidiaries or other affiliates (including, but not limited to, Hampshire International, LLC and Rio Garment S. de R.L. or its successor) and, without limitation and in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of or in any other capacity with another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.

 

(f)           The term “other enterprises” shall include, without limitation, employee benefit plans.

 

(g)           The term “serving at the request of the Company” shall include, without limitation, any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries.

 

(h)           A person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

 

Section 8.                      Limitation on Indemnification.  Notwithstanding any other provision herein to the contrary, the Company shall not be obligated pursuant to this Agreement:

 

(a)           Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee with respect to an action, suit or proceeding (or part thereof) initiated by Indemnitee unless such action, suit or proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Company.

 

(b)           Action for Indemnification. To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, unless Indemnitee is successful in establishing Indemnitee’s right to indemnification in such action, suit or proceeding, in whole or in part, or unless and to the extent that the court in such action, suit or proceeding shall determine that, despite Indemnitee’s failure to establish the right to indemnification, Indemnitee is entitled to indemnity for such expenses; provided, however, that nothing in this Section 8(b) is intended to limit the Company’s obligation with respect to the advancement of expenses to Indemnitee in connection with any such action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, as provided in Section 4 hereof.

 

(c)           Section 16 Violations. To indemnify Indemnitee on account of any proceeding with respect to which final judgment is rendered against Indemnitee for payment or an accounting of profits arising from the purchase or sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, or any similar successor statute.

 

Section 9.                      Certain Settlement Provisions.  The Company shall have no obligation to indemnify Indemnitee under this Agreement for amounts paid in settlement of any action, suit or proceeding without the Company’s prior written consent, which shall not be unreasonably withheld.  The Company shall not settle any action, suit or proceeding in any manner that would impose any fine or other obligation on Indemnitee without Indemnitee’s prior written consent, which shall not be unreasonably withheld.

 

Section 10.                      Savings Clause. If any provision or provisions of this Agreement shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify Indemnitee as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Company, to the fullest extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to the fullest extent permitted by applicable law.

 

Section 11.                      Contribution.  In order to provide for just and equitable contribution in circumstances in which the indemnification provided for herein is held by a court of competent jurisdiction to be unavailable to Indemnitee in whole or in part, it is agreed that, in such event, the Company shall, to the fullest extent permitted by law, contribute to the payment of Indemnitee’s costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, in an amount that is just and equitable in the circumstances, taking into account, among other things, contributions by other directors and officers of the Company or others pursuant to indemnification agreements or otherwise; provided, that, without limiting the generality of the foregoing, such contribution shall not be required where such holding by the court is due to (i) the failure of Indemnitee to meet the standard of conduct set forth in Section 1 hereof, or (ii) any limitation on indemnification set forth in Section 6(c), 8 or 9 hereof.

 

Section 12.                      Reimbursement of Legal Fees and Expenses.

 

(a)           It is the intent of the Company that Indemnitee not be required to incur legal fees and or other expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder.Accordingly, without limiting the generality or effect of any other provision hereof, if it should reasonably appear to Indemnitee that the Company has failed to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to improperly deny, or to improperly recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, the Company irrevocably authorizes the Indemnitee from time to time to retain counsel of Indemnitee’s choice, at the expense of the Company, to advise and represent Indemnitee in connection with any such interpretation, enforcement or defense, including without limitation the initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, employee, stockholder or other person affiliated with the Company, in any jurisdiction.  Without limiting the generality or effect of any other provision hereof or respect to whether Indemnitee prevails, in whole or in part, in connection with any of the foregoing, the Company will pay and be solely financially responsible for any and all attorneys’ and related fees and expenses actually and reasonably incurred by Indemnitee in connection with any of the foregoing.

 

Section 13.                      Form and Delivery of Communications.  Any notice, request or other communication required or permitted to be given to the parties under this Agreement shall be in writing and either delivered in person or sent by telecopy, overnight mail or courier service, or certified or registered mail, return receipt requested, postage prepaid, to the parties at the following addresses (or at such other addresses for a party as shall be specified by like notice):

 

	
If to the Company:

	  
	  	
Hampshire Group, Limited

114 W. 41st Street

8th Floor

New York, NY 10036

Attn: Heath L. Golden

President and Chief Executive Officer

Facsimile: 212-512-0388

	
With a copy to:

	  
	  	
Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY  10019

Attn: Steven J. Gartner and Mark A. Cognetti

Facsimile: 212-728-8111

	  	
If to Indemnitee, to such address provided in writing from time to time by Indemnitee.

 

Section 14.                      Subsequent Legislation. If the General Corporate Law of Delaware is amended after adoption of this Agreement to expand further the indemnification permitted to directors or officers, then the Company shall indemnify Indemnitee to the fullest extent permitted by the General Corporate Law of Delaware, as so amended.

 

Section 15.                      Nonexclusivity.  The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed exclusive of any other rights which Indemnitee may have under any provision of law, the Company’s Certificate of Incorporation or Bylaws, in any court in which a proceeding is brought, the vote of the Company’s stockholders or disinterested directors, other agreements or otherwise, and Indemnitee’s rights hereunder shall continue after Indemnitee has ceased acting as an agent of the Company and shall inure to the benefit of the heirs, executors and administrators of Indemnitee.  However, no amendment or alteration of the Company’s Certificate of Incorporation or Bylaws or any other agreement shall adversely affect the rights provided to Indemnitee under this Agreement.

 

Section 16.                      Enforcement.  The Company shall be precluded from asserting in any judicial proceeding that the procedures and presumptions of this Agreement are not valid, binding and enforceable. The Company agrees that its execution of this Agreement shall constitute a stipulation by which it shall be irrevocably bound in any court of competent jurisdiction in which a proceeding by Indemnitee for enforcement of his rights hereunder shall have been commenced, continued or appealed, that its obligations set forth in this Agreement are unique and special, and that failure of the Company to comply with the provisions of this Agreement will cause irreparable and irremediable injury to Indemnitee, for which a remedy at law will be inadequate. As a result, in addition to any other right or remedy Indemnitee may have at law or in equity with respect to breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief directing specific performance by the Company of its obligations under this Agreement.

 

Section 17.                      Interpretation of Agreement.  It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee to the fullest extent now or hereafter permitted by law.

 

Section 18.                      Entire Agreement.  This Agreement and the documents expressly referred to herein constitute the entire agreement between the parties hereto with respect to the matters covered hereby, and any other prior or contemporaneous oral or written understandings or agreements with respect to the matters covered hereby are expressly superseded by this Agreement.

 

Section 19.                      Modification and Waiver.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

Section 20.                      Successor and Assigns.  All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Company shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by written agreement in form and substance reasonably satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

Section 21.                      Service of Process and Venue.  For purposes of any claims or proceedings to enforce this agreement, the Company consents to the jurisdiction and venue of any federal or state court of competent jurisdiction in the states of Delaware and South Carolina, and waives and agrees not to raise any defense that any such court is an inconvenient forum or any similar claim.

 

Section 22.                      Supersedes Prior Agreement.  This Agreement supersedes any prior indemnification agreement between Indemnitee and the Company or its predecessors.

 

Section 23.                      Governing Law.  This Agreement shall be governed exclusively by and construed according to the laws of the State of Delaware, as applied to contracts between Delaware residents entered into and to be performed entirely within Delaware.  If a court of competent jurisdiction shall make a final determination that the provisions of the law of any state other than Delaware govern indemnification by the Company of its officers and directors, then the indemnification provided under this Agreement shall in all instances be enforceable to the fullest extent permitted under such law, notwithstanding any provision of this Agreement to the contrary.

 

Section 24.                      Employment Rights. Nothing in this Agreement is intended to create in Indemnitee any right to employment or continued employment.

 

Section 25.                      Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument, notwithstanding that both parties are not signatories to the original or same counterpart.

 

Section 26.                      Headings. The section and subsection headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

 

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective as of the date first above written.

 

	  	
HAMPSHIRE GROUP, LIMITED

	 	 
	  	  
	  	
By:

	
/s/ Heath L. Golden

	  	
Name:

	
Heath L. Golden

	  	
Title:

	
President and Chief Executive Officer

	 	 	 
	  	  	  
	  	
INDEMNITEE:

	 	 
	 	 
	  	
By:

	
/s/ David Gren

	  	
Name:

	
David Grenex10-2.htm

EXHIBIT 10.2

EMPLOYMENT AGREEMENT

BETWEEN

HAMPSHIRE INTERNATIONAL, LLC

AND

DAVID GREN

 

THIS AGREEMENT (this “Agreement”) is made and entered into as of the 13th day of June 2011 by and among Hampshire International, LLC, a Delaware limited liability company (the “Company”), David Gren (“Employee”), and, solely for purposes of Section 5(B), Hampshire Group, Limited, a Delaware corporation (“Hampshire”).

 

WHEREAS, Hampshire is a party to that certain Agreement and Plan of Merger (the “Acquisition Agreement”), dated as of the date hereof, by and among Hampshire, RG Merger Sub, S.A. (“Rio Garment”), Rio Garment S. de R.L., BGY II, LLC, and certain equity holders of Rio Garment S. de R.L.; and

 

WHEREAS, the Company desires to employ Employee following the closing of the transactions contemplated in the Acquisition Agreement and to enter into this Agreement embodying the terms of such employment, and Employee desires to enter into this Agreement and to accept such employment, subject to the terms and provisions of this Agreement.

 

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are mutually acknowledged, the parties hereby agree as follows:

 

1.           Employment.

 

(A)           Subject to the terms and conditions contained herein, Employee will serve as the President and General Manager of the Company and Rio Garment, and shall have such duties, responsibilities and authority commensurate with such title.  Employee also agrees to serve as a director of any other member of the Company Group (as defined below) and an officer of any subsidiary of the Company, in each case without additional compensation.  Employee will report directly to the Chief Executive Officer of Hampshire.  Consistent with prior business practice at Rio Garment, Employee’s principal places of business will be in Honduras and the United States, with Employee travelling between the two locations as he shall determine in his reasonable discretion, though Employee acknowledges and agrees that he will be required to travel from time to time for business purposes.

 

(B)           Employee shall devote his full business time, attention, skill, and best efforts to the performance of his duties under this Agreement and, except as provided below, shall not engage in any other business or occupation during the Term (as defined below), including, without limitation, any activity that (x) conflicts with the interests of the Company, Hampshire or any of its direct or indirect subsidiaries or affiliates (collectively, the “Company Group”), (y) interferes in any material respect with the proper and efficient performance of Employee’s duties for the Company, or (z) interferes with Employee’s exercise of judgment in the Company’s best interests.  Notwithstanding the foregoing, nothing herein shall preclude Employee from (i) continuing his ownership in, and advice regarding its U.S. screenprinting business to, Deep South Holding Company d/b/a CSI Screenprint; provided, that Deep South Holding Company’s business is limited to the U.S. screenprinting business, (ii) receipt of commissions from Industrias Norteamericanas S. de R. L. upon the sale of certain products consisting of knit and cut sew garments to American Eagle Outfitters, All Access Apparel, and Evy of California, Jem Sportwear, Rogue Sportswear and RGS, USA, pursuant to the commissions agreement in effect as of the date of the execution of the Acquisition Agreement; (iii) passive ownership of O’Quinn, Inc., a retail clothing company specializing in lifestyle products for the skateboard and surfing industry; provided, that Employee does not actively provide any services to O’Quinn, Inc., (iv) serving as a member of the boards of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of charitable organizations or, with the prior written consent of the Board, in similar capacities for for-profit entities, (v) engaging in charitable activities and community affairs, and (vi) managing his personal investments and affairs; provided, however, that the activities set out in clauses (i)-(vi) shall be limited by Employee so as not to materially interfere, individually or in the aggregate, with the performance of his duties and responsibilities hereunder.

 

  

  

  

 

2.           Term.  The term (the “Term”) of this Agreement shall commence on the Closing Date (as such term is defined in the Acquisition Agreement) and, unless terminated sooner as provided in Paragraph 6 hereof, shall continue during the period ending on the close of business on December 31, 2012 (the “Initial Term”).  Thereafter the Term shall be automatically extended, without further action by the Company or Employee, by one (1) additional year first on the expiration of the Initial Term, and then on each subsequent anniversary thereafter, unless, not less than thirty (30) days prior to the end of the Term (including any extension thereof), either Employee or the Company shall have notified the other in writing of his or its intention not to further extend the Term.  Notwithstanding anything herein to the contrary, the Company’s delivery of a notice of non-renewal of the Term to Employee shall constitute a termination without Cause (as defined below) for purposes of this Agreement.

 

3.           Salary.  As compensation for his services, Employee will be paid a base salary of Four Hundred Twenty Five Thousand Dollars ($425,000) per annum (“Base Salary”), payable in accordance with the Company’s customary payroll practices.  The Base Salary shall be periodically reviewed, at least annually, for potential increase.

 

4.           Incentive Compensation.  Employee shall be eligible for an annual incentive bonus award determined by Hampshire’s Compensation Committee (the “Compensation Committee”) in respect of each fiscal year during the Term (the “Annual Bonus”).  During the Initial Term, the target Annual Bonus for each fiscal year shall be 50% of Base Salary and the maximum Annual Bonus will be 150% of Base Salary, with the actual Annual Bonus payable being based upon the level of achievement of annual Company and individual performance objectives for such fiscal year, as determined by the Compensation Committee and communicated to Employee.  Unless otherwise determined by the Compensation Committee, the performance criteria shall be weighted as follows: thirty percent (30%) on Hampshire performance versus budget, forty-five percent (45%) on the Company’s operating profit versus budget (which for 2011 only shall be determined based on the reforecast budget for Rio Garment previously agreed to by Employee and Hampshire), fifteen percent (15%) on the Company’s net sales versus budget (which for 2011 only shall be determined based on the reforecast budget for Rio Garment previously agreed to by Employee and Hampshire), and ten percent (10%) upon the achievement of individual performance objectives.  Employee’s Annual Bonus for 2011 shall be prorated based on the number of days worked in that year.  The Annual Bonus shall be paid to Employee at the same time as annual bonuses are generally payable to other senior executives of the Company subject to Employee’s continuous employment through the payment date, except as otherwise provided in Section 6 below.

 

  

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5.           Benefits.

 

(A)           Employee Benefits.  During the Term, Employee shall be entitled to participate in health, insurance, retirement, and other benefits provided generally to similarly situated employees of the Company.  Employee shall be entitled to twenty (20) days of paid vacation each year.  Employee shall also be entitled to the same number of holidays and sick days, as well as any other benefits, in each case as are generally allowed to similarly situated employees of the Company in accordance with the Company policy as in effect from time to time.  Nothing contained herein shall be construed to limit the Company’s ability to amend, suspend, or terminate any employee benefit plan or policy at any time without providing Employee notice, and the right to do so is expressly reserved.

 

(B)           Equity Incentives.  Hampshire intends to establish a stock incentive plan (the “Stock Plan”) for the benefit of Company Group employees as soon as practicable following the Closing Date.  Employee shall be eligible to participate in the Stock Plan and shall receive an initial grant that is comparable in the aggregate (both in respect of the grant date fair value of the grant and the terms and conditions thereon) to the initial grants made to similarly situated employees of Hampshire (which shall, for purposes of this paragraph, include, the Chief Financial Officer of Hampshire and the President of Hampshire Brands).  Employee shall be eligible for subsequent grants, as determined by the Board of Directors of Hampshire (the “Board”) or the Compensation Committee from time to time.

 

(C)           Expenses.  During the Term, the Company shall pay (or promptly reimburse Employee) for documented, out-of-pocket expenses reasonably incurred by Employee in the course of performing his duties and responsibilities hereunder, which are consistent with the Company’s policies in effect from time to time with respect to business expenses, subject to the Company’s requirements with respect to reporting of such expenses.  Additionally, upon submission of proper invoices, the Company shall reimburse Employee for up to $4,500 per full calendar month during the period from the Closing Date through December 31, 2011 for the cost of his housing in New York City.

 

6.           Termination.

 

(A)           The Company may terminate the employment relationship at any time for any reason.  If Employee’s employment is terminated by the Company without Cause (other than on account of Employee’s death or “disability” (within the meaning of the Company’s long-term disability policy)) or by Employee for Good Reason (as defined below), Employee shall be entitled to the following payments and benefits (i) continuation of Base Salary for a period of eighteen (18) months, payable pursuant to the Company’s customary payroll practices, (ii) any earned but unpaid Annual Bonus for the year prior to the year of termination, payable within 10 days following the date of  termination, and (iii) a pro rata portion of any Annual Bonus he would otherwise have been entitled to receive under Paragraph 4 hereof for the year of termination, such pro rata amount will be paid after year end in accordance with the Company’s customary payroll practices and will be calculated by multiplying the annual bonus he would otherwise have been entitled to receive under Paragraph 4 hereof by a fraction, the numerator of which is the number of completed full months in the current fiscal year through the date of termination (by way of example, if Employee is terminated on August 16, the numerator will be seven) and the denominator of which is 12.  Employee will not be entitled to and shall not receive any additional compensation or benefits of any other type following the date of termination (except for reimbursement pursuant to Paragraph 5(C) of expenses incurred during the Term).  If Employee’s employment is terminated for any reason other than by the Company without Cause or by Employee for Good Reason, Employee will not be entitled to and shall not receive any severance, bonus or benefits of any type following the date of termination (except for reimbursement pursuant to Paragraph 5(C) of expenses incurred during the Term).  Notwithstanding the foregoing, the payments and benefits described in this Paragraph 6(A) shall immediately terminate, and the Company shall have no further obligations to Employee with respect thereto, in the event that Employee breaches in any material respect any provision of the Paragraph 7 below.

 

  

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For purposes of this Agreement, “Cause” for termination shall exist only if Employee (i) breaches his fiduciary duty of loyalty owed to the Company, (ii) is convicted of, or pleads guilty or “no contest” to, a felony, (iii) commits willful misconduct involving acts of moral turpitude or that otherwise result in, or could reasonably be expected to result in, material injury to the Company or its subsidiaries, (iv) materially breaches this Agreement, (v) materially fails to follow a written instruction of a superior or (vi) in carrying out his duties and responsibilities, is guilty of gross neglect or gross misconduct.

 

For purposes of this Agreement, “Good Reason” shall mean without Employee’s consent, (i) a material diminution in Employee’s title, duties, or responsibilities as set forth in Paragraph 1 hereof, (ii) a reduction in base salary set forth in Paragraph 3 hereof, (iii) any requirement for Employee to relocate his principal places of business or any reduction in Employee’s right to determine his travel schedule between the two locations, or (iv) any other material breach of a provision of this Agreement by the Company or Hampshire.  Employee may terminate his employment for Good Reason by providing the Company ten (10) days’ written notice setting forth in reasonable specificity the event that constitutes Good Reason, which written notice, to be effective, must be provided to the Company within sixty (60) days of the occurrence of such event.

 

Notwithstanding any provision herein to the contrary, the payment of any amount or provision of any benefit in this Paragraph 6(A) (collectively, the “Severance Benefits”) shall be conditioned upon Employee’s execution, delivery to the Company, and non-revocation of a release of claims reasonably requested by the Company (and the expiration of any revocation period contained in such release of claims) within sixty (60) days following the date of Employee’s termination of employment hereunder.  If Employee fails to execute the release of claims in such a timely manner so as to permit any revocation period to expire prior to the end of such sixty (60) day period, or timely revokes his acceptance of such release following its execution, Employee shall not be entitled to any of the Severance Benefits.  Further, to the extent that any of the Severance Benefits constitutes “nonqualified deferred compensation” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), any payment of any amount or provision of any benefit otherwise scheduled to occur prior to the sixtieth (60th) day following the date of Employee’s termination of employment hereunder, but for the condition on executing the release of claims as set forth herein, shall not be made until the first regularly scheduled payroll date following such sixtieth (60th) day, after which any remaining Severance Benefits shall thereafter be provided to Employee according to the applicable schedule set forth herein.

 

  

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(B)           Employee may terminate the employment relationship at any time for any reason by giving written notice at least three (3) months prior to the effective date of termination.  In the event of termination of Employee’s employment under this Paragraph 6(B), he shall have the right to retain all compensation and reimbursements for outstanding expenses incurred on behalf of the Company through the effective date of termination but will not be entitled to and shall not receive any severance, bonus or benefits of any type following the date of termination (except for reimbursement pursuant to Paragraph 5(C) of expenses incurred during the Term).  In the event of termination of Employee’s employment under this Paragraph 6(B), the Company may, in its sole and absolute discretion, by written notice accelerate such date of termination without changing the characterization of such termination as a voluntary termination by Employee.  Following such termination of Employee’s employment by Employee, except as set forth in this Paragraph 6(B), Employee shall have no further rights to any compensation or any other benefits under this Agreement (except for reimbursement pursuant to Paragraph 5(C) of expenses incurred during the Term).

 

(C)           If Employee’s employment with the Company continues beyond the expiration of the Term, Employee shall be considered an “at-will” employee and shall not be entitled to any payments or benefits under this Agreement upon any subsequent termination of employment for any reason whatsoever.

 

(D)           Upon any termination of Employee’s employment for any reason, except as may otherwise be requested by the Company in writing and agreed upon in writing by Employee, Employee shall resign from any and all directorships, committee memberships, and any other positions Employee holds with the Company or any other member of the Company Group.  Notwithstanding anything herein to the contrary, the payment (or commencement of a series of payments) hereunder of any nonqualified deferred compensation (within the meaning of Section 409A of the Code) upon a termination of employment shall be delayed until such time as Employee has also undergone a “separation from service” as defined in Treas. Reg. 1.409A-1(h), at which time such nonqualified deferred compensation (calculated as of the date of Employee’s termination of employment hereunder) shall be paid (or commence to be paid) to Employee on the schedule set forth in this Paragraph 6 as if Employee had undergone such termination of employment (under the same circumstances) on the date of his ultimate “separation from service.”

 

  

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7.           Covenants of Employee.

 

(A)           Confidential Information.  At any time during and after Employee’s employment hereunder, without the prior written consent of the Company, except to the extent required by an order of a court having jurisdiction or under subpoena from an appropriate government agency, in which event, Employee shall use his best efforts to consult with the Company prior to responding to any such order or subpoena, and except as required in the performance of his duties hereunder, Employee shall not disclose to or use for the benefit of any third party any Confidential Information (as defined below).

 

(B)           Non-Competition.  At any time during and after Employee’s employment hereunder and during the eighteen (18) month period immediately following any termination of such employment for any reason, Employee shall not, directly or indirectly, individually or on behalf of any person, company, enterprise, or entity, or as a sole proprietor, partner, stockholder, director, officer, principal, agent, or executive, or in any other capacity or relationship, engage in any Competitive Activities in any jurisdiction in which the Company Group is engaged in (or has demonstrable plans to commence) business activities; provided, however, that Employee shall not be deemed to be in breach of this Paragraph 7(A) solely as a result of his (i) ownership in, and advice regarding its U.S. screenprinting business to, Deep South Holding Company d/b/a CSI Screenprint; provided, that Deep South Holding Company’s business is limited to the U.S. screenprinting business, (ii) receipt of commissions from Industrias Norteamericanas S. de R. L. upon the sale of certain products consisting of knit and cut sew garments to American Eagle Outfitters, All Access Apparel, Evy of California, Jem Sportwear, Rogue Sportswear and RGS, USA, pursuant to the commissions agreement in effect as of the date of the execution of the Acquisition Agreement, or (iii) passive ownership of O’Quinn, Inc., a retail clothing company specializing in lifestyle products for the skateboard and surfing industry; provided, that Employee does not actively provide any services to O’Quinn, Inc.

 

(C)           Non-Solicit.  At any time during and after Employee’s employment hereunder and during the eighteen (18) month period immediately following any termination of such employment for any reason, Employee shall not, directly or indirectly, for his own account or for the account of any other individual or entity, engage in Interfering Activities (as defined herein).

 

(D)           For purposes of this Agreement:

 

(i)           “Competitive Activities” shall mean any business activity that is competitive with the then-current or demonstrably planned business activities of any member of the Company Group.

 

(ii)           “Confidential Information” shall mean confidential or proprietary trade secrets, client lists, client identities and information, information regarding service providers, investment methodologies, marketing data or plans, sales plans, management organization information, operating policies or manuals, business plans or operations or techniques, financial records or data, or other financial, commercial, business or technical information (i) relating to any member of the Company Group, or (ii) any member of the Company Group may receive belonging to suppliers, customers or others who do business with any member of the Company Group, but shall exclude any information that is in the public domain or hereafter enters the public domain, in each case without the breach by Employee of this Paragraph 7.

 

  

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(iii)           “Interfering Activities” shall mean (i) encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce, any individual employed by any member of the Company Group to terminate such individual’s employment with any member of the Company Group, or (ii) encouraging, soliciting or inducing, or in any manner attempting to encourage, solicit or induce any client, account, customer, licensee or other business relation of any member of the Company Group to cease doing business with or reduce the amount of business conducted with any member of the Company Group, or in any way interfere with the relationship between any such client, account, customer, licensee or business relation and any member of the Company Group.

 

(E)           Employee acknowledges and recognizes the highly competitive nature of the Company’s business, that access to Confidential Information renders him special and unique within the Company’s industry, and that he will have the opportunity to develop substantial relationships with existing and prospective clients, accounts, customers, consultants and contractors, investors and strategic partners of the Company during the course of and as a result of his employment with the Company. In light of the foregoing, Employee acknowledges and agrees that the restrictions and limitations set forth in this Paragraph 7 are reasonable and valid in geographical and temporal scope and in all other respects, and are essential to protect the value of the business and assets of the Company Group.

 

(F)           Employee expressly acknowledges that any breach or threatened breach of any of the terms and/or conditions set forth in this Paragraph 7 may result in substantial, continuing and irreparable injury to the Company.  Therefore, Employee hereby agrees that, in addition to any other remedy that may be available to the Company, the Company shall be entitled to seek injunctive relief, specific performance or other equitable relief by a court of appropriate jurisdiction in the event of any breach or threatened breach of the terms of this Paragraph 7 without the necessity of proving irreparable harm or injury as a result of such breach or threatened breach.

 

8.           Developments.

 

(A)           Developments Retained and Licensed.  Employee agree to provide, within ten (10) days following the date of this Agreement, a list on the attached Schedule A that describes with particularity all developments, original works of authorship, developments, improvements, and trade secrets that Employee can demonstrate were created or owned by him prior to the commencement of his employment (collectively referred to as “Prior Developments”), which belong solely to Employee or belong to Employee jointly with another, that relate in any way to any of the actual or proposed businesses, products, or research and development of any member of the Company Group, and that are not assigned to the Company hereunder, or if no such list is attached, Employee represents that there are no such Prior Developments.  If, during any period during which Employee performs or performed services for the Company Group after the date hereof (the “Assignment Period”), whether as an officer, employee, director, independent contractor, consultant, or agent, or in any other capacity, Employee incorporates into a Company Group product or process a Prior Development owned by Employee or in which Employee has an interest, Employee hereby grants the Company, and the Company Group shall have, a non-exclusive, royalty-free, irrevocable, perpetual, transferable worldwide license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell, and otherwise distribute such Prior Development as part of or in connection with such product or process.

 

  

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(B)           Assignment of Developments.  Employee agrees that Employee will, without additional compensation, promptly make full written disclosure to the Company, and will hold in trust for the sole right and benefit of the Company all developments, original works of authorship, inventions, concepts, know-how, improvements, trade secrets, and similar proprietary rights, whether or not patentable or registrable under copyright or similar laws, which Employee may solely or jointly conceive or develop or reduce to practice, or have solely or jointly conceived or developed or reduced to practice, or have caused or may cause to be conceived or developed or reduced to practice, during the Assignment Period, whether or not during regular working hours, provided they either (i) relate at the time of conception, development or reduction to practice to the business of any member of the Company Group, or the actual or anticipated research or development of any member of the Company Group; (ii) result from or relate to any work performed for any member of the Company Group; or (iii) are developed through the use of equipment, supplies, or facilities of any member of the Company Group, or any Confidential Information, or in consultation with personnel of any member of the Company Group (collectively referred to as “Developments”).  Employee further acknowledges that all Developments made by Employee (solely or jointly with others) within the scope of and during the Assignment Period are “works made for hire” (to the greatest extent permitted by applicable law) for which Employee is, in part, compensated by his salary, unless regulated otherwise by law, but that, in the event any such Development is deemed not to be a work made for hire, Employee hereby assigns to the Company, or its designee, all his rights, titles, and interests throughout the world in and to any such Development.

 

(C)           Maintenance of Records.  Employee agrees to keep and maintain adequate and current written records of all Developments made by Employee (solely or jointly with others) during the Assignment Period. The records may be in the form of notes, sketches, drawings, flow charts, electronic data or recordings, and any other format.  The records will be available to and remain the sole property of the Company Group at all times.  Employee agrees not to remove such records from the Company’s place of business except as expressly permitted by Company Group policy, which may, from time to time, be revised at the sole election of the Company Group for the purpose of furthering the business of the Company Group.

 

(D)           Intellectual Property Rights.  Employee agrees to assist the Company, or its designee, at the Company’s expense, in every way to secure the rights of the Company Group in the Developments and any copyrights, patents, trademarks, service marks, database rights, domain names, mask work rights, moral rights, and other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, recordations, and all other instruments that the Company shall deem necessary in order to apply for, obtain, maintain, and transfer such rights and in order to assign and convey to the Company Group the sole and exclusive right, title, and interest in and to such Developments, and any intellectual property and other proprietary rights relating thereto.  Employee further agrees that his obligation to execute or cause to be executed, when it is in his power to do so, any such instrument or papers shall continue after the Assignment Period until the expiration of the last such intellectual property right to expire in any country of the world; provided, however, the Company shall reimburse Employee for his reasonable expenses incurred in connection with carrying out the foregoing obligation.  If the Company is unable because of Employee’s mental or physical incapacity or unavailability for any other reason to secure Employee’s signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Developments or original works of authorship assigned to the Company as above, then Employee hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as his agent and attorney in fact to act for and in his behalf and stead to execute and file any such applications or records and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance, and transfer of letters patent or registrations thereon with the same legal force and effect as if originally executed by Employee.  Employee hereby waives and irrevocably quitclaims to the Company any and all claims, of any nature whatsoever, that he now or hereafter have for past, present, or future infringement of any and all proprietary rights assigned to the Company.

 

  

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9.           Independence; Severability.  Each of the rights enumerated in this Agreement shall be independent of the others and shall be in addition to and not in lieu of any other rights and remedies available to the parties at law or in equity.  If any of the provisions of this Agreement or any part of any of them is hereafter construed or adjudicated to be invalid or unenforceable, the same shall not affect the remainder of this Agreement, which shall be given full effect without regard to the invalid portions.  If any of the covenants contained herein are held to be invalid or unenforceable because of the duration of such provisions or the area or scope covered thereby, the parties hereto agree that the court making such determination shall have the power to reduce the duration, scope and/or area of such provision to the maximum and/or broadest duration, scope and/or area permissible by law and in its reduced form said provision shall then be enforceable.

 

10.           Taxes.  The Company may withhold from any payments made under this Agreement all applicable taxes, including but not limited to income, employment, and social insurance taxes, as shall be required by law.  Employee acknowledges and represents that the Company has not provided any tax advice to him in connection with this Agreement and that he has been advised by the Company to seek tax advice from his own tax advisors regarding this Agreement and payments that may be made to him pursuant to this Agreement, including specifically, the application of the provisions of Section 409A of the Code to such payments.

 

11.           Set Off; Mitigation.  The Company’s obligation to pay Employee the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim, or recoupment of amounts owed by Employee to the Company or its affiliates; provided, however, that to the extent any amount so subject to set-off, counterclaim, or recoupment is payable in installments hereunder, such set-off, counterclaim, or recoupment shall not modify the applicable payment date of any installment, and to the extent an obligation cannot be satisfied by reduction of a single installment payment, any portion not satisfied shall remain an outstanding obligation of Employee and shall be applied to the next installment only at such time the installment is otherwise payable pursuant to the specified payment schedule.  Employee shall not be required to mitigate the amount of any payment provided pursuant to this Agreement by seeking other employment or otherwise, the amount of any payment provided for pursuant to this Agreement shall not be reduced by any compensation earned as a result of Employee’s other employment or otherwise.

 

  

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12.           Additional Section 409A Provisions.  Notwithstanding any provision in this Agreement to the contrary:

 

(A)           Any payment otherwise required to be made hereunder to Employee at any date as a result of the termination of Employee’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the “Delay Period”).  On the first business day following the expiration of the Delay Period, Employee shall be paid, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.

 

(B)           Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code.

 

(C)           To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A of the Code), (i) any such expense reimbursement shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred by Employee, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided, that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect.

 

(D)           While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A of the Code, in no event whatsoever shall the Parent or any of its affiliates (including, without limitation, the Company) be liable for any additional tax, interest, or penalties that may be imposed on Employee as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A of the Code).

 

13.           Successors and Assigns; No Third-Party Beneficiaries.

 

(A)           The Company.  This Agreement shall inure to the benefit of the Company and its respective successors and assigns.  Neither this Agreement nor any of the rights, obligations, or interests arising hereunder may be assigned by the Company to a Person (other than another member of the Company Group, or its or their respective successors) without Employee’s prior written consent (which shall not be unreasonably withheld, delayed, or conditioned); provided, however, that in the event of a sale of all or substantially all of the assets of the Company or any direct or indirect division or subsidiary thereof to which the Employee’s employment primarily relates, the Company may provide that this Agreement will be assigned to, and assumed by, the acquiror of such assets, it being agreed that in such circumstances, Employee’s consent will not be required in connection therewith.

 

  

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(B)           Employee.  Employee’s rights and obligations under this Agreement shall not be transferable by Employee by assignment or otherwise, without the prior written consent of the Company; provided, however, that if Employee shall die, all amounts then payable to Employee hereunder shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee, or other designee, or if there be no such designee, to Employee’s estate.

 

(C)           No Third-Party Beneficiaries.  Nothing expressed or referred to in this Agreement will be construed to give any person other than the Company, the other members of the Company Group, and Employee any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement.

 

14.           Waiver and Amendments.  Any waiver, alteration, amendment, or modification of any of the terms of this Agreement shall be valid only if made in writing and signed by each of the parties hereto; provided, however, that any such waiver, alteration, amendment, or modification must be consented to on the Company’s behalf by the Board.  No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.

 

15.           Entire Agreement.  This Agreement contains the entire understanding of the Company and Employee with respect to compensation of Employee and supersedes any and all prior understandings, written or oral.  This Agreement may not be amended, waived, discharged or terminated orally, but only by an instrument in writing signed by both parties.

 

16.           Governing Law; Arbitration.  EXCEPT WHERE PREEMPTED BY FEDERAL LAW, THE VALIDITY, INTERPRETATION, CONSTRUCTION, AND PERFORMANCE OF THIS AGREEMENT IS GOVERNED BY AND IS TO BE CONSTRUED UNDER THE LAWS OF THE STATE OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THAT STATE, WITHOUT REGARD TO CONFLICT OF LAWS RULES.  ANY DISPUTE OR CLAIM ARISING OUT OF THIS AGREEMENT OR A CLAIMED BREACH, EXCEPT THAT WHICH INVOLVES A RIGHT TO INJUNCTIVE RELIEF, SHALL BE RESOLVED BY ARBITRATION.  UNLESS THE PARTIES AGREE OTHERWISE, THE ARBITRATION SHALL BE HELD IN NEW YORK CITY AND PURSUANT TO THE EMPLOYMENT ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION.  THE ARBITRATOR’S DECISIONS SHALL BE FINAL AND BINDING UPON THE PARTIES AND JUDGMENT MAY BE ENTERED IN ANY COURT.  WITH RESPECT TO ANY DISPUTE THAT IS THE SUBJECT OF ARBITRATION, THE NON-PREVAILING PARTY, IF ANY (AS DETERMINED BY THE ARBITRATOR) SHALL BE RESPONSIBLE FOR ALL FEES AND COSTS, INCLUDING ATTORNEY’S FEES, INCURRED BY THE PREVAILING PARTY, IF ANY.

 

  

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17.           Notices.

 

(A)           Place of Delivery.  Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom or which it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided, that unless and until some other address be so designated, all notices and communications by Employee to the Company shall be mailed or delivered to the Company at its principal executive office, and all notices and communications by the Company to Employee may be given to Employee personally or may be mailed to Employee at Employee’s last known address, as reflected in the Company’s records.

 

(B)           Date of Delivery.  Any notice so addressed shall be deemed to be given or received (i) if delivered by hand, on the date of such delivery, (ii) if mailed by courier or by overnight mail, on the first business day following the date of such mailing, and (iii) if mailed by registered or certified mail, on the third business day after the date of such mailing.

 

18.           Section Headings.  The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof or affect the meaning or interpretation of this Agreement or of any term or provision hereof.

 

19.           Survival of Operative Sections.  Upon any termination of Employee’s employment, the provisions of Paragraph 6 through Paragraph 20 of this Agreement (together with any related definitions) shall survive to the extent necessary to give effect to the provisions thereof.

 

20.           Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature.

 

21.           Conditional Upon Closing of Transactions.  This Agreement shall be conditioned upon the closing of the transactions contemplated by the Acquisition Agreement.  In the event that the Acquisition Agreement terminates prior to the closing of the transactions contemplated thereby, this Agreement shall be void ab initio.

 

*           *           *

 

  

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IN WITNESS WHEREOF, the parties hereto have set their respective hands and seals as of the day and year first above written.

 

	 	HAMPSHIRE INTERNATIONAL, LLC	 
	 	 	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Heath L. Golden	 
	 	Name: 	Heath L. Golden	 
	 	Title:  	Chairman and President   	 
	 	 	 	 

 

 

	 	HAMPSHIRE GROUP, LIMITED	 
	 	solely for purposes of Section 0	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Heath L. Golden	 
	 	Name: 	Heath L. Golden	 
	 	Title:  	President and Chief Executive Officer	 
	 	 	 	 
	 	 	/s/ David Gren	 
	 	 	David Gren	 

 

  

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SCHEDULE A

 

LIST OF PRIOR DEVELOPMENTS

 

AND ORIGINAL WORKS OF AUTHORSHIP

 

EXCLUDED FROM SECTION 8

 

	
Title

	
Date

	
Identifying Number or

Brief Description

	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  

 

_____  No Developments or improvements

 

_____  Additional Sheets Attached

 

Signature of Employee: ________________________

 

Print Name of Employee: David Gren

 

Date:________

 

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