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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT effective
as of January 1, 2002 by and between NORTON McNAUGHTON OF SQUIRE,
INC., a New York corporation (the "Company"), and LYNNE F. FISH
(the "Executive").
W I T N E S S E T H :
WHEREAS, the Company
wishes to continue to employ the Executive, and the Executive
wishes to continue employment with the Company on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, it is
agreed as follows:
1. Employment.
During the term of this Agreement, the Company shall employ the
Executive as the President of the Company, with overall
responsibility for and authority over all of the operations of the
Company, other than the operations of Miss Erika, Inc. and Jeri-Jo
Knitwear, Inc., which the Company anticipates will be merged with
and into the Company and which will be operated as independent
divisions reporting directly to the chief executive officer (the
"Group CEO") of the Moderate Apparel Group ("MAG") of Jones Apparel
Group, Inc. ("Jones"). Executive shall also serve as the President
of MAG, with direct responsibility for those MAG product lines
(presently Evan-Picone, Jones Wear and Nine and Company) for which
she may have responsibility from time to time (all references
herein to Executive's responsibilities with and to the Company
shall include such responsibilities for any such MAG product
lines). The Executive shall report directly to the Group CEO.
During the Term of this Agreement, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote all of Executive's business time and
attention to the business affairs of the Company, and to perform
such responsibilities in a professional manner. Notwithstanding the
foregoing, during the Term of this Agreement, it shall not be a
violation of this Agreement for the Executive to (a) serve on civic
or charitable boards or committees; (b) deliver lectures, fulfill
speaking engagements or teach at educational institutions; (c)
serve as a non-employee member of a board of directors of a
business entity which is not competitive with Jones and as to which
the Board of Directors of Jones has given its consent; and (d)
attend to personal business, so long as such activities do not
interfere with the performance of the Executive's responsibilities
in accordance with this Agreement.
2. Term. The
Executive shall be employed for the period (the "Initial Term")
commencing January 1,2002 (the "Employment Commencement Date") and
ending on December 31, 2004 (the "Expiration Date"), as renewed in
accordance with the following sentence (the "Term"). The
Executive's employment will continue, and this Agreement will be
automatically extended without limitation, for successive 12-month
periods commencing January 1 and ending December 31, unless either
party to this Agreement advises the other in writing, no later than
December 31, 2002 and each December 31 thereafter, that such party
does not wish to extend (a "Non-extension Notice"). If this
Agreement shall be so extended, the "Expiration Date" shall mean
the then applicable extended "Expiration Date", and the "Term"
shall mean the
period commencing on the Employment Commencement Date and ending
on the then applicable extended "Expiration Date".
For example, (i) if
by December 31, 2002, neither party has given a Non-extension
Notice to the other, the Term will be automatically extended
through December 31, 2005, and (ii) if the Term is so extended
through December 31, 2005, then if by December 31, 2003, neither
party has given a Non-extension Notice to the other, the Term will
be automatically extended through December 31, 2006.
3. Salary,
Retirement Plans, Fringe Benefits and Allowances; Commencement
Bonus.
(a) Throughout the Term, the Executive shall receive a salary at
the annual rate of not less than $600,000. The Executive's salary
shall be payable at such regular times and intervals as the Company
customarily pays its senior executives from time to time, but no
less frequently than once a month.
(b) During the Term, the Executive shall be eligible to participate
in all savings and retirement plans, practices, policies and
programs to the extent applicable generally to other senior
executives of the Company.
(c) During the Term, the Executive and/or the Executive's family,
as the case may be, shall be eligible for participation in and
shall receive all benefits under welfare, fringe and other benefit
plans, practices, policies and programs provided by the Company
(including, without limitation, medical, prescription drug, dental,
disability, accidental death and travel accident insurance plans
and programs) to the extent applicable generally to other senior
executives of the Company.
(d) The Executive shall be entitled to an aggregate of four (4)
weeks paid vacation during each 12-month period ending December 31
(a "Year"). The Executive shall also be entitled to the benefits of
the Company's policies relating to sick leave and holidays.
(e) The Executive shall have all expenses reasonably incurred by
Executive on behalf of the Company reimbursed by the Company in
accordance with the Company's standard policies and practices. The
Executive shall be entitled to first class seating for air travel
on Company business.
4. Bonus. The
Executive shall be eligible to receive an annual bonus for her
services hereunder, in the discretion of the Board of Directors of
the Company upon the recommendation of the Group CEO.
5. Stock
Options. Subject to the absolute authority of the Stock Option
Committee of the Board of Directors of Jones from time to time to
grant (or not to grant) to eligible individuals options to purchase
common stock of Jones, during the Term the Executive shall be
eligible to receive options to participate in Jones' stock-based
compensation plans which may be in effect from time to time during
the Term.
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6. Termination of
Employment.
(a) By the Company for Cause, or by the Executive without Good
Reason. The Company may terminate the Executive's employment for
Cause (as defined herein), and the Executive may resign without
Good Reason (as defined herein), before the Expiration Date. If the
Executive's employment is terminated for Cause, or if Executive
resigns during the Term without Good Reason (as defined below), the
Company shall pay to the Executive any unpaid salary through the
date of termination and any bonus earned in the prior Year but not
yet paid, as well as reimburse the Executive for any unpaid
reimbursable expenses incurred on behalf of the Company, and
thereafter the Company shall have no additional obligations to the
Executive under this Agreement.
(b) Death or Disability. (i) If the Executive's employment
terminates before the Expiration Date because of Executive's death
or Disability (as defined herein), the Company shall pay Executive
or Executive's duly appointed personal representative, as the case
may be, (i) any unpaid salary through the date of death or the
Disability Termination Date (as defined herein) and any bonus
earned in the prior Year but not yet paid, as well as reimbursement
of any unpaid reimbursable expenses incurred on behalf of the
Company, and (ii) an amount equal to Executive's monthly salary
during each of the six (6) months following Executive's death or
the Disability Termination Date. Except as set forth in this
Section 6(b), the Company shall have no additional obligations to
the Executive under this Agreement in the event of Executive's
termination of employment under this Section 6(b).
(ii) In addition to the foregoing and notwithstanding any other
agreement between the Executive and the Company, all options to
purchase the Company's common stock which were held by the
Executive at the time of the Executive's death or the Disability
Termination Date, shall become fully exercisable and shall remain
exercisable by the Executive or by the Executive's estate or
representative, as the case may be, during the remaining original
term of the option in the case of the Executive's Disability, or
during the 3-year period following the date of the Executive's
death.
(c) By the Company without Cause, or by the Executive for Good
Reason. The Company may terminate the Executive's employment before
the Expiration Date without Cause, and the Executive may terminate
Executive's employment before the Expiration Date for Good Reason,
upon 30-days written notice to the other party. If the Executive's
employment is so terminated by the Company without Cause, or by the
Executive for Good Reason, as the case may be, the Company shall
pay and provide to the Executive (i) any unpaid salary through the
date of termination and any bonus earned in the prior Year but not
yet paid, as well as reimbursement of any unpaid reimbursable
expenses incurred on behalf of the Company, and (ii) during each
month of the Severance Period (as defined below), an amount equal
to Executive's monthly salary at the rate in effect immediately
preceding termination. Except as set forth in this Subsection 6(c),
the Company shall not have any additional obligations to the
Executive under this Agreement in the event of Executive's
termination of employment under this Subsection 6(c).
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(d) As used herein:
(i) the term "Cause" shall mean (v) the Executive's commission of a
proven act of fraud or dishonesty or a crime involving money or
other property of the Company; (w) the Executive's conviction of a
felony or a plea of guilty or nolo contendere to an indictment for
a felony; (x) if, in carrying out Executive's duties hereunder, the
Executive engages in conduct which constitutes willful misconduct
or gross negligence; (y) the Executive's failure to carry out a
lawful order of the Board of Directors of the Company or the Group
CEO; or (z) a material breach by the Executive of this Agreement.
Any act or failure to act on the part of the Executive which is
based upon authority given pursuant to a resolution duly adopted by
the Board of Directors of the Company or authorized in writing by
the Group CEO, or based upon the advice of counsel for the Company,
shall not constitute Cause as used herein. For purposes of this
provision only, a breach shall be "material" if it is demonstrably
injurious to the Company, its affiliates or any of its respective
business units, financially or otherwise.
Cause shall not exist
unless and until the Company (i) has delivered to the Executive a
written Notice of Termination that specifically identifies the
events, actions, or non-actions, as applicable, that the Company
believes constitute Ca
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