Exhibit
10.1
TERMINATION
AGREEMENT
TERMINATION AGREEMENT effective as
of November 1, 2008 between SWANK, INC., a Delaware corporation
having its principal office at 90 Park Avenue, New York, New York
10016 (the “ Company ”), and
_________________________________ (“ Employee
”).
W I T N E S S E T H :
WHEREAS, in consideration of the
contribution that has been, and can continue to be, made by
Employee toward the success of the business of the Company, the
Company desires to enter into this Agreement with Employee;
and
WHEREAS, Employee desires to enter
into this Agreement with the Company.
NOW, THEREFORE, in consideration of
the mutual covenants contained herein and for other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Company and Employee hereby agree as
follows:
1.
Term and Operation of
Agreement . This
Agreement shall be effective for a term (the “ Term
”) commencing as of November 1, 2008 and ending on the
earlier of (i) October 31, 2011 (subject to extension as provided
below) and (ii) the termination of Employee’s employment
prior to a Change in Control (as hereinafter defined) of the
Company; provided , however , that (x) prior to a Change in Control, the
expiration date set forth in clause (i) above shall be
automatically extended on each October 31 during the Term,
commencing on October 31, 2009, for an additional year unless the
Company shall have given the Employee not less than 30 days’
written notice prior to the then current expiration date that there
shall be no extension (in which event the expiration date set forth
in such clause (i), as theretofore extended, shall not thereafter
be further extended) and (y) notwithstanding the foregoing, if
there is a Change in Control subsequent to October 31, 2008, but
prior to the termination of this Agreement in accordance with the
foregoing, then the Term shall be automatically fixed as a two-year
term commencing on the date such Change in Control shall have
occurred and ending on the second anniversary of the date of such
Change in Control.
For purposes of this Agreement,
Employee’s employment by the Company shall be deemed to be
continuing (i) for any period during which, in accordance with any
contract between him and the Company (“ Employment
Agreement ”), provision shall be made for Employee to
perform services as an employee of the Company and Employee shall
be entitled to compensation from the Company for same, or (ii) if
there is no Employment Agreement, for any period during which
Employee is in fact performing services as an employee of the
Company and receiving compensation from the Company for
same.
2.
Change in Control-Termination of Employment and Compensation
in Event of
Termination .
(a) After
a Change in Control has occurred, Employee may terminate his
employment within two years thereafter upon the occurrence of any
of the following events:
(i) Failure
to elect or appoint, or re-elect or re-appoint, Employee to, or
removal of Employee from, his office and/or position with the
Company as constituted immediately prior to the Change in Control,
except in connection with the termination of Employee’s
employment pursuant to subparagraph 3(a) hereof.
(ii) A
reduction in Employee’s overall compensation (including any
reduction in pension or other benefit programs or perquisites) or a
significant change in the nature or scope of the authorities,
powers, functions or duties normally attached to Employee’s
position with the Company as referred to in clause (i) of
subparagraph 2(a) hereof.
(iii) A
determination by Employee made in good faith that, as a result of a
Change in Control, he is unable to effectively carry out the
authorities, powers, functions or duties attached to his position
with the Company as referred to in clause (i) of subparagraph 2(a)
hereof, and the situation is not remedied within thirty (30)
calendar days after receipt by the Company of written notice from
Employee of such determination.
(iv) A breach
by the Company of any provision of this Agreement not covered by
clauses (i), (ii) or (iii) of this subparagraph 2(a), which is not
remedied within thirty (30) calendar days after receipt by the
Company of written notice from Employee of such breach.
(v) A
change in the location at which substantially all of
Employee’s duties with the Company are to be performed to a
location which is not within a 20-mile radius of the address of the
place where Employee is performing services immediately prior to
the Change in Control.
(vi) A
failure by the Company to obtain the assumption of, and the
agreement to perform, this Agreement by any successor (within the
meaning of paragraph 9).
An election by Employee to terminate
his employment under the provisions of this subparagraph 2(a) shall
not be deemed a voluntary termination of employment by Employee for
the purpose of interpreting the provisions of any of the
Company’s employee benefit plans, programs or policies,
except to the extent necessary to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “ Code
”). Employee’s right to terminate his employment for
good reason shall not be affected by his illness or incapacity,
whether physical or mental, unless the Company shall at the time be
entitled to terminate his employment under paragraph 3(a)(ii) of
this Agreement. Employee’s continued employment with the
Company for any period of time less than two years after a Change
in Control shall not be considered a waiver of any right he may
have to terminate his employment pursuant to this paragraph
2(a).
(b) After
a Change in Control has occurred, and subject to paragraph 3(f) of
this Agreement, if Employee terminates his employment with the
Company pursuant to subparagraph 2(a) hereof or if Employee’s
employment is terminated by the Company for any reason other than
pursuant to paragraph 3(a) hereof, Employee (i) shall be entitled
to his salary, bonuses, awards, perquisites and benefits,
including, without limitation, benefits and awards under the
Company’s stock option plans and the Company’s pension
and retirement plans and programs, through the Termination Date (as
hereafter defined) and, in addition thereto (ii) shall be entitled
to be paid in a lump-sum in an amount of cash (to be computed, at
the expense of the Company, by BDO Seidman, LLP, independent
certified public accountants to the Company, or such other
independent certified accountants regularly employed by the Company
(the “ Accountants ”) in charge of the
Company’s account immediately prior to the Change in Control,
whose computation shall be conclusive and binding upon Employee and
the Company) equal to 2.99 times Employee’s “base
amount” as defined in Code Section 280G(b)(3) (less such
reductions, if any, provided for in any written employment
agreement between the company and Employee). Such lump-sum payment
is hereinafter referred to as the “ Termination
Compensation .”
(c) The
Termination Compensation shall be paid on Employee’s
Termination Date unless it is determined that Employee is a
“specified employee” (within the meaning of Code
Section 409A and the regulations thereunder) at the time of the
Employee’s termination of employment, in which case the
payment of the Termination Compensation shall be delayed until the
date which is 6 months after the date of Employee’s
separation from service (or, if earlier than the end of such
6-month period, the date of Employee’s death)and shall be
increased to reflect interest during the period of the delay
calculated on the basis of the prime rate as reported in The Wall
Street Journal as in effect on the date of such termination of
employment.
(d) Upon
payment of the Termination Compensation and all amounts to which
Employee may be entitled under subparagraph 2(b), any Employment
Agreement between Employee and the Company shall terminate and be
of no further force or effect.
(e) For
purposes hereof, a Change in Control shall be deemed to have
occurred (i) if there has occurred a change in control as the term
“control” is defined in Rule 12b-2 promulgated under
the Securities Exchange Act of 1934 as in effect on the date hereof
(the “ Exchange Act ”); (ii) when any “
person ” (as such term is defined in Sections 3(a)(9)
and 13(d)(3) of the Exchange Act), except for an employee stock
ownership trust (or any of the trustees thereof) of the Company,
becomes a beneficial owner, directly or indirectly, of securities
of the Company representing twenty-five (25%) percent or more of
the Company’s then outstanding securities having the right to
vote on the election of directors; (iii) during any period of not
more than two (2) consecutive years (not including any period prior
to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into
an agreement with the Company to effect a transaction described in
clauses (i), (ii), (iv), (v), (vi) or (vii) of this subparagraph
2(c)) whose election by the Board or nomination for election by the
Company’s
stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who were
either directors at the beginning of the period or whose election
or nomination for election was previously approved, cease for any
reason to constitute at least seventy-five (75%) percent of the
entire Board of Directors; (iv) when a majority of the directors
elected at any annual or special meeting of stockholders (or by
written consent in lieu of a meeting) are not individuals nominated
by the Company’s incumbent Board of Directors; (v) if the
stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which would result in the holders of voting
securities of the Company outstanding immediately prior thereto
being the holders of at least eighty (80%) percent of the voting
securities of the surviving entity outstanding immediately after
such merger or consolidation; (vi) if the shareholders of the
Company approve a plan of complete liquidation of the Company; or
(vii) if the shareholders of the Company approve an agreement for
the sale or disposition of all or substantially all of the
Company’s assets. However, the foregoing notwithstanding, no
Change in Control shall be deemed to have occurred as a result of
any event specified in clauses (i)-(v) of this paragraph 2(e) if
John Tulin shall remain as the chief executive officer of the
Company following such event.
(f) It
is intended that the “present value” of the payments
and benefits to Employee, whether under this Agreement or
otherwise, which are includable in the c
