9/19/94
CONSULTING AGREEMENT
--------------------
between
Designs, Inc.
and
Stanley I. Berger
December 21, 1994
CONSULTING AGREEMENT
--------------------
THIS CONSULTING AGREEMENT made as of this 21st day of December, 1994 by and
between Designs, Inc., a Delaware corporation (the "Company"), and Stanley I.
Berger of Chestnut Hill, Massachusetts (the "Consultant").
WITNESSETH:
WHEREAS, the Consultant has heretofore been employed as a senior executive
officer of the Company for more than seventeen years;
WHEREAS, the Company wishes to retain the Consultant to perform consulting
services with respect to the Company's merchandising and merchandising policies
for its business; and
WHEREAS, the Consultant is willing to perform such services for the
consideration and on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Company and the Consultant hereby agree as follows:
1. Scope of Services. The Consultant shall provide consulting services
to the Company with respect to its business (the "Work"). In performing the
Work, the Consultant shall report to, and act under the direction of, the
President of the Company or such other person(s) as the Company may designate.
2. Performance of Services. During the term of this Agreement, the
Consultant shall devote an average of at least 4 days per week to the Work. The
Consultant shall use his best efforts in performing the Work.
3. Term. The term of this Agreement shall commence on the date hereof
and shall expire at the close of business on December 20, 1997, unless earlier
terminated as hereinafter set forth.
4. Compensation.
(a) In full consideration for the Consultant's Work hereunder, the
Company shall pay him at the rate of $250,000 per annum, payable monthly on the
first day of each calendar month in arrears. If this Agreement shall terminate
because of the death or disability of the Consultant, the Company shall continue
to make such payments to the Consultant, or if he should die, to his wife, Mrs.
Sandra Berger (or if she should predecease him, to his estate), for the
remainder of the term of this Agreement.
(b) During the term of this Agreement and thereafter, the Consultant
and his wife, Mrs. Sandra Berger, shall be entitled to participate in the health
plan maintained by the Company for its employees, as it may from time to time be
in effect, or a comparable plan or arrangement provided by the Company to the
extent health coverage for the Consultant and Mrs. Sandra Berger is not provided
by Medicare or another government program. Any premiums for such plan or
arrangement shall be paid by the Company. During the term of this Agreement,
the Consultant shall be entitled to other benefits only to the extent the
Company's Board of Directors or the Compensation Committee of such Board of
Directors shall separately authorize such benefits (except that the Consultant
shall still be entitled to any compensation or benefits due to an outside
director of the Company for so long as he shall serve in such capacity).
(c) The Company shall reimburse the Consultant for all expenses
reasonably incurred by him in the course of his consulting hereunder and in
accordance with the policies of the Company from time to time in effect.
(d) During the term of this Agreement, the Company shall make
available to the Consultant for use in connection with his work hereunder one
late model automobile comparable to the last automobile provided to him by the
Company while he was an officer of the Company and shall reimburse the
Consultant for reasonable gasoline, repair and other expenses of operation of
such automobile. Promptly after December 20, 1997, the Company shall transfer
title to such automobile to the Consultant.
5. Non-Competition and Protection of Proprietary Information. In
recognition of the fact that as a senior consultant of the Company, the
Consultant will possess confidential information concerning the Company, its
subsidiaries and joint ventures and the Company's suppliers and will possess
trade secrets and other proprietary information which are vital to the
competitive position and success of the Company, the Consultant agrees that:
(a) During the term of the Consultant's consulting hereunder and for
a period of two (2) years thereafter, the Consultant shall not, directly or
indirectly, participate as stockholder, partner, principal, owner, manager,
consultant, director, officer, agent, representative or employee in any
business, firm, corporation or other entity which directly or indirectly
competes in the retail apparel business with the Company or any subsidiary or
joint venture of the Company in the eastern United States. In the event that
this provision is determined by a court of competent jurisdiction to be
unenforceable by reason of its extending for too great a period of time or over
too large a geographic area or over too broad a range of activities, it shall be
interpreted to extend only over the maximum period of time, geographic area and
range of activities as to which it may be enforceable. Notwithstanding the
foregoing, the Consultant may own an equity interest in any corporation so long
as such corporation's securities are traded on a registered securities exchange
or in the "over-the-counter" market and such equity interest therein does not
exceed 5% of the total equity of such corporation.
(b) The Consultant shall hold confidential all of the trade secrets
and other proprietary information of the Company, or any of its subsidiaries or
joint ventures or the Company's suppliers, and shall not, during or after the
termination of his employment hereunder, use any of such trade secrets and other
proprietary information or any part thereof, for any purpose other than those of
the Company, its subsidiaries or joint ventures or disclose any such trade
secret or proprietary information to any person, firm, corporation or other
entity, whether or not in competition with the Company or any subsidiary or
joint venture of the Company, for any reason or purpose whatsoever. The
foregoing restrictions shall not apply to any information which the Consultant
is required to disclose by law or by order of court or which the Consultant can
demonstrate (a) is or becomes generally available to or otherwise enters the
public domain other than by breach by the Consultant of his agreements herein or
by action of a member of his family or (b) is received by the Consultant from
any person or entity other than a member of his family, which person or entity
has no obligation to maintain such information in confidence.
6. Termination.
(a) This Agreement shall terminate automatically at any time during
its term upon the death of the Consultant. In addition, this Agreement may be
terminated by the Company upon written notice to the Consultant on account of
disability of the Consultant, or for cause, each as defined below.
(i) For purposes of this Section 6(a), "disability" shall mean
the inability of the Consultant to perform his duties hereunder for a
period of six (6) consecutive months due to the incapacity, by reason of
health or otherwise, of the Consultant.
(ii) For purposes of this Section 6(a), "cause" shall mean any
conduct by the Consultant which involves (A) any dishonesty, moral
turpitude, embezzlement, fraud or criminal misconduct, it being expressly
agreed and understood that no conviction of the Consultant for such conduct
shall be required for such conduct to constitute "cause" hereunder; (B) any
material violation of the written policies of the Company; (C) any material
non-performance of duties; (D) any breach of any term or condition of this
Agreement; or (E) any action which is purposely disloyal and detrimental to
the Company.
(b) This Agreement may be terminated by the Consultant upon fourteen
(14) days prior written notice to the Company if the Company shall fail without
appropriate justification hereunder to make two consecutive payments required
under Section 4 hereof or commits any other material breach of this Agreement
unless the Company cures such nonpayment or breach within ten (10) days of
receipt of written notice thereof from the Consultant. Upon any such
termination for nonpayment or breach by the Company, as the Consultant's sole
remedy, all remaining amounts otherwise payable under Section 4(a) hereof
(whether or not otherwise due and payable at the time of such termination) shall
immediately be due and payable, and the Consultant shall be entitled to interest
thereon at the rate of eight (8%) per annum until such amount shall be paid to
him.
(c) This Agreement may be terminated by the Consultant upon sixty
(60) days' prior written notice to the Company if the Consultant determines
that, due to personal circumstances, he is unwilling or unable to continue to
perform his obligations hereunder. In such event, Sections 1, 2 and 4 hereof
shall cease to be of any force or effect, but the remainder of this Agreement
shall survive such termination.
(d) In the event of a breach of this Agreement, the non-breaching
party shall be paid by the breaching party its or his reasonable attorneys' fees
incurred in enforcement of the Agreement.
7. Miscellaneous Provisions.
(a) Nothing in this Agreement shall require the Company to remain in
the apparel retail business for any period of time, or, except as specifically
provided in this Agreement, restrict the Company in any way in the management of
its business or any part thereof.
(b) The Consultant acknowledges that money damages alone will not
adequately compensate the Company for breach of any of his obligations under
Section 5 hereof and, therefore, agrees that in the event of the breach or a
threatened breach of any such obligation, in addition to all other remedies
available to the Company, at law, in equity or otherwise, the Company shall be
entitled to injunctive relief compelling specific performance of, or other
compliance with, the terms of such Section.
(c) The covenants and agreements of the Consultant in Section 5
hereof shall survive the expiration or earlier termination of this Agreement.
(d) In furnishing services pursuant to this Agreement, the Consultant
shall at all times act as an independent contractor. This Agreement shall not
constitute the Consultant an agent or legal representative of the Company for
any purpose whatsoever and creates no relationship of employment, principal and
agent, partnership or joint venturers. The Consultant shall have no authority
to bind the Company or to create any express or implied obligation for the
Company, and shall not hold himself out as having such authority. The
Consultant shall have full responsibility for payment of, and shall pay, all
compensation, social security, unemployment, withholding and other taxes and
charges for himself as and when the same become due and payable, and the Company
shall have no obligation to pay or make available any employee benefit to the
Consultant other than the health benefits described in Section 4(b) of this
Agreement and the provision of an automobile described in Section 4(d) of this
Agreement and other than any compensation or benefits that may be due to him as
an outside director.
(e) This Agreement and the rights and obligations of the Consultant
hereunder are personal and shall not be assigned by him without the prior
written consent of the Company, which consent may be withheld for any reason.
(f) This Agreement may be amended, modified or supplemented only by a
written instrument executed by the parties hereto.
(g) No waiver of any provision of this Agreement or consent to any
departure from the terms hereof shall be effective unless the same shall be in
writing and signed by the party waiving or consenting thereto. No failure on
the part of any party to exercise, or delay in exercising, any right or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or remedy by such party preclude any other or further
exercise thereof or the exercise of any other right or remedy. The waiver by
any party hereto of a breach of any provision of this Agreement shall not
operate as a waiver of any subsequent breach. All rights and remedies hereunder
are cumulative and are in addition to and not exclusive of any other rights and
remedies provided by law.
(h) All notices, requests, demands and other communications which are
required or may be given under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or sent by registered
or certified mail, return receipt requested, postage prepaid (i)
if to the Consultant, to
Stanley I. Berger
100 Essex Road
Chestnut Hill, Massachusetts 02167
(ii) if to the Company, to
Designs, Inc.
1244 Boylston Street
Chestnut Hill, Massachusetts 02167
Attention: Chief Executive Officer
or to such other address as the Consultant or the Company shall have specified
by such notice in writing to the other.
(i) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, whether written or oral, between the
parties concerning such subject matter.
(j) This Agreement shall inure to the benefit of, and be binding
upon, the Consultant and his heirs, legal representatives, successors and
permitted assigns and the Company and its successors and permitted assigns,
including, without limitation, any corporation with which the Company may merge
or consolidate pursuant to a transaction in which the Company is not the
surviving corporation.
(k) This Agreement shall be governed by, and construed and enforced
in accordance with, the substantive laws of The Commonwealth of Massachusetts,
without regard to its principles of conflicts of laws.
IN WITNESS WHEREOF, the Company and the Consultant have executed this
Consulting Agreement as of the date first above written.
ATTEST: DESIGNS, INC.
/s/ Scott N. Semel By: /s/ Joel H. Reichman
Its President
WITNESS:
/s/ Scott N. Semel /s/ Stanley I. Berger