October 18, 1994
Mr. Herbert Aronson
150 Central Park South
Apt. 506
New York, New York 10019
Dear Herb:
Reference is hereby made to both the Employment Agreement, dated
as of December 31,
1990 and the Renewal and Extension Letter, dated June 30, 1992,
between yourself as the
Employee and Salant Corporation.
We have mutually agreed to amend the Employment Agreement,
effective January 1, 1995, as
follows:
The first sentence of Section 3 of the Employment Agreement
is hereby amended as
follows:
"3. Employment Period. The period of the Employee's
employment (the
"Employment Period") shall commence on January 1, 1995 and shall
end on December 31,
1996."
Section 4 of the Employment Agreement is hereby deleted in
its entirety and is
substituted with the following therefore:
"4. Compensation. During the Employment Period,
Salant shall pay to the
Employee as compensation for his services:
(a) a salary at the rate of $365,000 per annum for the
1995 fiscal year; and a
salary at the rate of $380,000 per annum for the 1996 fiscal
year, payable in equal semi-
monthly installments.
(b) A bonus, in accordance with attached Exhibit 1.
Each bonus shall be paid
by Salant to the Employee within ninety (90) days after the end
of the fiscal year of Salant
for which such bonus is payable. If the employment of the
Employee is terminated under
Section 11 or otherwise than "for cause" as defined in Section
10, or if the fiscal year of
Salant is changed so that the termination of the Employment
Period is not on the last day of
Salant's fiscal year, the bonus amount payable under this Section
4 shall be the amount to
which the Employee would have been entitled thereunder had his
employment continued for
the full fiscal year, prorated by the proportion that the number
of months of the employment
of the Employee hereunder completed during that fiscal year (as
rounded to the nearest
month) bears to twelve (12)."
Section 7 is hereby deleted in its entirety and is
substituted with the following
therefore:
" 7. Consulting Period.
(a) Upon the termination of the Employment Period on
December 31, 1996, unless
sooner terminated under Section 10 or Section 11, the Employee
shall cease to be an
employee of Salant and the Employee hereby agrees to become a
consultant (as an
independent contractor and not as an employee) to Salant, and
Salant so agrees to retain the
Employee for a five (5) year period commencing on January 1, 1997
and ending on
December 31, 2001 (the "Consulting Period"). There shall not be
a Consulting Period if the
Employment Period is terminated under Section 10 or Section 11.
As a consultant, the
Employee shall render such consulting services to Salant during
the Consulting Period as
Salant may reasonably request, subject to the following:
(i) the Employee shall only be required to render
such consulting services in
New York, New York and the Employee shall not be required to
render such consulting
services for more than fifty-four (54) complete business days in
any fiscal year of Salant
during the Consulting Period;
(ii) Salant shall pay to the Employee on the last day
of each and every month
during the Consulting Period the sum of $8,333.33 per month
during the Consulting Period,
provided, however, that if Salant elects to call on the Employee
for more than fifty-four (54)
complete days of consulting during any fiscal year of the
Consulting Period, and the
Employee renders such services, it will pay Employee an
additional sum of $1,800 per day
for each day of consulting in excess of fifty-four (54) in such
fiscal year. The Employee has
the right to decline to perform consulting services in excess of
fifty-four (54) days in any
fiscal year; once the Employee has worked fifty-four (54) days
in any fiscal year the $1,800
per day shall commence and be paid to the Employee on the last
day of each month during
said fiscal year for the number of days so worked by the
Employee; and
(iii) the noncompetition covenant contained in Section
9 shall remain in full
force and effect throughout the Consulting Period and the
Employee agrees to be bound
thereby.
(b) At any time the Employee may elect to terminate
the Consulting Period (or, if
during the Employment Period, to eliminate the Consulting
Period), in each case effective on
ninety (90) days prior written notice to Salant (or upon the
termination of the Employment
Period, as the case may be). If such election is made, upon the
termination of the last of the
Employment Period or the Consulting Period, the Employee shall
not be required to observe
and comply with the noncompetition covenant contained in Section
9 herein, and Salant shall
not be required to make any further payments to the Employee
after termination of the
Consulting Period or Employment Period, as the case may be,
except for salary, bonus or
consulting fees accrued but unpaid to such termination date, and
upon such payment, this
Agreement shall terminate."
The first sentence of Section 9 of the Employment Agreement
is hereby deleted and
substituted with the following therefore:
"Subject to the provisions of Section 7 of this Agreement,
the Employee agrees, as a
separate and independent covenant which is of the essence of this
Agreement, that in the
event the Employee shall cease to remain in the employ of Salant
for any reason other than
the wrongful discharge of the Employee or other substantial
breach of this Agreement by
Salant, the Employee will not, for a period commencing with the
date of such termination of
employment and concluding on December 31, 2001, without express
written approval in each
case of the Board of Directors of Salant (or any corporation
succeeding to a substantial
portion of its assets), engage, or be otherwise directly or
indirectly interested, (i) as an
individual, (ii) as a director, officer, employee, consultant,
independent contractor or other
similar capacity, (iii) by acting through or with any other
person, firm or corporation, or (iv)
by owning any stock or having any other interest in such a
business other than a corporation
listed on a national securities exchange in which the Employee
and members of his family,
directly or indirectly, own less than 1% of the outstanding
stock, in the business of
manufacturing and/or selling men's shirts, ties, scarves or other
neckwear items, belts,
suspenders and small leather goods (hereinafter called the
"Products") anywhere in the United
States of America, its territories and possessions, or sell or
solicit orders for the Products
from any customer, either for himself or on behalf of any other
person, firm, partnership,
association or corporation."
Section 11(c) is hereby deleted in its entirety and is
substituted with the following
therefore:
"(c) Further Payments.
(i) In the event that the Employment Period hereunder
is terminated because
of death or disability of the Employee as provided in (a) or (b)
above, Salant agrees to pay
the Employee or his estate (i) any sums accrued but unpaid as of
the date of termination of
the Employment Period; and (ii) the sum of $50,000 a year, in
equal monthly installments on
the last day of each month, for a period of five (5) years
commencing on the date of such
termination of the Employment Period. If such termination is
caused by the disability of the
Employee, such payment shall only be made so long as the Employee
continues to comply
with the noncompetition agreement contained in Section 9, hereof.
(ii) In the event that the Consulting Period hereunder
is terminated because of
death or disability of the Employee as provided in (a) or (b)
above, Salant agrees to pay the
Employee or his estate (i) any sums accrued but unpaid as of the
date of termination of the
Consulting Period; and (ii) the sum of $50,000 a year, in equal
monthly installments on the
last day of each month, for the remaining balance of the
Consulting Period had it not been so
terminated. If such termination is caused by the disability of
the Employee, such payments
shall only be made so long as the Employee continues to comply
with the noncompetition
agreement contained in Section 9 hereof."
Section 12(a) is hereby deleted in its entirety and is
substituted with the following
therefore:
"12. Change in Control.
(a) In the event of a "change in control" of Salant
(defined in accordance with
Section 12(b) below) during the Employment Period (but not during
the Consulting Period)
and if Employee is not then in material default in the
performance of his obligations under
this Agreement, Employee shall have the right to elect to
terminate his obligation to render
services under this Agreement by notice in writing to Salant. In
the event he elects to do so,
Salant shall pay the Employee, as severance pay, in a lump sum
(on the later of the date of
Employee's termination of employment or five days after the
delivery to Salant of Employee's
written notice of his election to terminate his employment) the
salary (not including bonus or
the value of any fringe benefits) to be paid for the remainder of
the Employment Period (and
not including the Consulting Period), but in no event less than
the salary (not including bonus
or the value of any fringe benefits) for six months. In the
event Employee elects to terminate
the Employment Period under this Section 12, there shall then
commence, for a five (5) year
period, the Consulting Period, as to which the provisions of
Sections 7 and 9 above shall
apply.
(b) The "change in control" that shall be the
precondition for the exercise of
the Employee's rights under this Section 12 shall be defined in
the same manner, and the
Employee's right to terminate his employment shall be exercisable
under the same
circumstances, as shall be provided for in the employment
contract of Salant's Chief
Executive Officer."
Salant Corporation's address, as referenced in Section 16 of
the Employment
Agreement is hereby deleted in its entirety and substituted with
the following therefore:
"Salant Corporation
1114 Avenue of the Americas, 36th Floor
New York, New York 10036
Attention: Todd Kahn, Esq."
Except as specifically set forth herein, the Employment Agreement
remains in full force and
effect and is hereby ratified, confirmed and approved. The
Employment Agreement, as
modified by this letter, is the only agreement that governs the
terms of your employment.
Effective January 1, 1995, all other letters, agreements and
memorandum are hereby null and
void.
If the foregoing correctly sets forth our mutual agreement,
please sign and return to me the
attached copies of this letter.
Very truly yours,
SALANT CORPORATION
By: /s/ Nicholas P. DiPaolo
Nicholas P. DiPaolo
Chairman of the Board,
President and CEO
Accepted and Agreed To:
By: /s/ Herbert R. Aronson
Herbert R. Aronson
Date: 10/21/94