EMPLOYMENT AGREEMENT
AGREEMENT made as of this 1st day of February, 1994, by and between
G-III
Apparel Group, Ltd., a Delaware corporation (the "Company"), with
its principal
place of business at 345 West 37th Street, New York, New York 10018
and MORRIS
GOLDFARB (the "Executive"), who resides at 21 Fairway Drive,
Mamaroneck, New
York 10543.
WHEREAS, the Company and the Executive are parties to an Employment
Agreement (the "Prior Agreement"), dated July 31, 1989, as amended
July, 1992;
and
WHEREAS, the Board of Directors of the Company desires that the
Executive
enter into this Agreement so that the Company may be assured of the
services of
the Executive for the term of this Agreement and the Executive is
desirous of
providing such services on the terms and conditions as provided for
in this
Agreement, and
WHEREAS, it is the intention of the Company and the Executive that
this
Agreement supersede the Prior Agreement, and that from and as of
the date hereof
the Prior Agreement shall be cancelled and of no further force and
effect.
NOW THEREFORE, in consideration of the foregoing, and the
respective
covenants and agreements herein contained, the parties hereto agree
as follows:
1. Duties. The Company shall employ the Executive, and the
Executive shall
serve, as President and Chief Executive Officer of the Company
during the
Employment Term (as hereinafter defined), and shall devote his full
working time
toward the performance of such duties and responsibilities as
provided for in
the Company's By-Laws, and such other duties and responsibilities
as may from
time to time be prescribed by the Company's Board of Directors
which are
consistent with his position as President and Chief Executive
Officer of the
Company; provided, however, Executive may engage or participate in
such other
activities incidental to any other employment, occupation or
business venture or
enterprise which does not materially interfere with or compromise
his ability to
perform his duties hereunder.
The Company shall use its best efforts to cause the Executive to be
a
member of its Board of Directors throughout the Employment Term and
shall
include him in the management slate for election as a director at
every
stockholders' meeting at which his term as a director would
otherwise expire.
The Board of Directors shall not amend its By-Laws or take any
other action to
reduce the scope of the Executive's authority and responsibilities,
unless he
shall otherwise consent, or except as otherwise provided in this
Agreement.
During the Employment Term, the Executive shall not, directly or
indirectly, without the prior consent of a majority of the members
of the
Company's Board of Directors, as owner, partner, joint venturer,
shareholder,
employee, corporate officer or director, engage or become
financially interested
in, be employed by, or render consulting services to any business
in direct
competition with any business engaged in during the Employment Term
by the
Company or its subsidiaries in any geographic area in North America
where,
during the term of his employment, the business of the Company or
any of its
subsidiaries is being conducted; provided; however, that the
Executive may own
any securities of any corporation which is engaged in any such
business and
which is publicly owned and traded but in an amount not to exceed
at any one
time two percent of any class of stock or securities of such
company.
2. Term. The term of this Agreement and of the term of employment
(the
"Employment Term") of the Executive shall be from the date hereof
until January
31, 1996, unless sooner terminated in accordance with the terms
hereof.
Thereafter, this Agreement shall automatically be renewed for
successive one
year terms, which shall extend the "Employment Term" of this
Agreement, unless
either party shall give the other not less than ninety (90) days
prior written
notice of its or his intent not to renew this Agreement beyond the
Employment
Term as then in effect.
3. Base Compensation.
a. Salary. During the Employment Term, the Executive shall receive
a
base salary at the rate of $650,000 per annum, subject to such
increases as may
be approved by the Company's Board of Directors, payable in
accordance with the
Company's normal payroll policy at the time in effect.
b. Nonexclusive. Compensation of the Executive by salary payments
shall not be deemed exclusive and shall not prevent the Executive
from
participating in any other compensation or benefit plans of the
Company.
c. Expenses. The Company acknowledges and agrees that the
Executive,
in rendering services hereunder, will be required to spend sums of
money for
travel to various locations throughout the world and for the
entertainment of
various persons and representatives of companies and organizations
with whom the
Company is having, or would like to have, business relationships.
The Company
shall reimburse the Executive, upon presentation by the Executive
of
documentation therefor, for any travel, entertainment or other
business expenses
reasonably incurred by the Executive in rendering services
hereunder on behalf
of the Company. The Executive shall be entitled to receive such
reimbursement
within fifteen (15) days after he has delivered an itemized expense
account
therefor to the Company. The parties hereto agree that the
Executive shall be
entitled to stay in first-class hotel accommodations and to
otherwise avail
himself of first-class travel and entertainment facilities in
connection with
Executive's employment hereunder.
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d. Automobile. The Company shall provide the Executive with an
automobile or shall reimburse the Executive for the cost thereof.
e. Disability. If during the Employment Term the Executive becomes
disabled or incapacitated to the extent that he is unable to
perform his duties
hereunder (due to any physical or mental injury, illness or defect)
for a period
of 180 consecutive days, then the Company shall thereafter pay to
the Executive
fifty percent of the amount of the annual base salary provided for
pursuant to
Section 3 hereof during the period of such disability or
incapacity, in the same
manner set forth in said Section 3, for the balance of the
Employment Term.
During such 180 day period, the Executive shall be entitled to
receive his
annual base salary provided for in Section 3.
f. Life Insurance. The Executive shall be entitled to cause an
ordinary life insurance policy in the face amount of $2,000,000 to
be issued by
an insurance company of the Executive's choice on the Executive's
life naming
the Executive's wife as beneficiary. The Company shall reimburse
the Executive
on demand for the cost of all premiums in connection with the
maintenance of
said policy.
g. Health Insurance. The Company, at its sole cost and expense,
shall
cause full health insurance coverage to be provided in favor of the
Executive
during the Employment Term as the same is regularly provided for
the Company's
senior executive employees, including, without limitation, major
medical,
hospitalization and dental insurance. In lieu thereof, the
Executive shall be
entitled to cause such insurance to be issued by an insurance
company of the
Executive's choice in such amounts as the Executive shall
determine, and the
Company shall reimburse the Executive on demand for the cost of all
premiums in
connection with the maintenance of such policies.
h. Other Benefits. The Executive shall be entitled to participate
in
and receive benefits under the Company's employee benefit plans and
arrangements
in effect on the date hereof (in accordance with their respective
terms) or to
participate in or receive benefits under those plans or
arrangements of the
Company providing the Executive with at least equivalent benefits
thereunder
(and giving credit for all plan purposes for service rendered by
the Executive
to the Company and its subsidiaries). The Company shall not make
any changes in
such plans or arrangements (including, if applicable, the funding
through
insurance or otherwise of such plans or arrangements) that would
adversely
affect the Executive's rights or benefits thereunder in a manner
different from
the Company's other senior executives. The Executive shall be
entitled to
participate in or receive benefits under any employee benefit plan
or
arrangement made available by the Company in the future to its
senior executives
and key management employees, subject to, and on a basis consistent
with the
terms, conditions and overall administration of such plans and
arrangements. Any
payments or benefits payable to the Executive hereunder in respect
of any year
during which the Executive is employed by the Company for less than
the entire
year shall, unless otherwise provided in the applicable plan or
arrangement, be
prorated in accordance with the number of days in such year during
which he is
so employed.
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i. Vacations. The Executive shall be entitled to five (5) weeks of
paid vacations days in each calendar year, or such greater (but not
lesser)
number of weeks as may be determined by the Board of Directors from
time to time
during the term hereof. The Executive shall also be entitled to all
paid
holidays given by the Company to its senior executives.
j. Supplemental Pension. For each full year of the Executive's
employment hereunder in which the Company's Net After-Tax Income
(hereinafter
defined) exceeds $1,500,000, the Company will credit at least
$50,000 to a
bookkeeping account established in the name of the Executive. The
term "Net
After-Tax Income" as used in this Agreement shall mean the net
after tax income
of the Company and its subsidiaries, as reported in the
consolidated financial
statements of the Company prepared by the Company's independent
public
accountants; provided, however, that Net After-Tax Income shall be
determined
without regard to any extraordinary item, as such term is used in
generally
accepted accounting principles. The amount credited to the
Executive's
bookkeeping account, together with investment gain or loss thereon
(on a basis
to be determined) will be payable to the Executive by the Company
as soon as
practicable after the Executive's termination of employment with
the Company and
its subsidiaries; provided, however, that no such amount will be
payable if the
Executive's employment is terminated by the Company for "cause" (as
such term is
defined in Section 6(a) hereof) or if the Executive's employment
terminates for
any reason other than death or disability within one year from the
date hereof.
The Company shall establish a grantor trust and shall contribute to
said trust
the principal amount of each year's deferred compensation credit.
The assets of
the trust will be applied to satisfy the Company's obligations to
the Executive
under this section 3(j), it being understood, however, that the
assets of the
trust will be subject to the claims of the Company's creditors in
the event of
the Company's prior bankruptcy. It is contemplated that the
Company's Board of
Directors will adopt a supplemental executive retirement plan and
that the
deferred compensation agreement set forth in this section 3(j) will
be subject
to the terms and provisions of said plan to the extent that such
terms and
provisions are not inconsistent with the terms and provisions
hereof.
k. Option Grant. Subject to the approval by the stockholders of the
Company of amendments to the Company's 1989 Stock Option Plan (the
"Plan") at
the 1994 Annual Meeting of Stockholders, the Company will grant to
the Executive
an option under the Plan, which shall not be an Incentive Stock
Option (as
defined in the Plan), to purchase 100,000 shares of the Company's
Common Stock,
$.01 par value (the "Common Stock"), at a per share exercise price
equal to
$4.00, the closing price of the Common Stock on the Nasdaq National
Market on
the date of this Agreement. Such stock option shall vest over a
five-year period
as follows: 20% on January 31, 1995; 20% on January 31, 1996; 20%
on January 31,
1997; 20% on January 31, 1998; and 20% on January 31, 1999. The
foregoing, as
well as such other terms and conditions as the Company shall deem
appropriate,
shall be set forth in a definitive stock option agreement to be
entered into by
the Company and the Executive. The Executive's rights as an
optionee shall be
governed by the terms and conditions of such agreement and the
Plan.
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1. Services Furnished. The Company shall furnish the Executive with
office space, secretarial and stenographic assistance and such
other facilities
and services as shall be suitable to the Executive's position and
adequate for
the performance of his duties as set forth in S
