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EMPLOYEE SEPARATION AGREEMENT
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THIS AGREEMENT made as of this 7th day of August, 1996 by and between
Designs, Inc., a Delaware corporation having a usual place of business in
Needham, Massachusetts ("Designs"), and William D. Richins ("Richins") of
Wilton, Connecticut.
W I T N E S S E T H T H A T:
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WHEREAS, Designs has employed Richins most recently pursuant to an
Employment Agreement dated as of October 16, 1995 (the "Agreement"); and
WHEREAS, Designs and Richins desire to set forth the terms of the
termination of Richins's employment at Designs;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements set forth herein, Designs and Richins hereby agree as follows:
1. Richins hereby resigns as an employee and officer of Designs and its
affiliates, effective July 15, 1996 (the "termination date"). Richins will
execute and deliver to Designs a separate instrument embodying such resignation
in the form of Exhibit A; shall sign the internal memorandum which is attached
hereto as Exhibit B; and shall execute and file with the SEC a "Form 5" in the
form attached hereto as Exhibit C. Richins shall not hereafter be considered an
officer or employee of Designs and its affiliates.
2. Provided Richins has executed and delivered this Employee Separation
Agreement (the "ESA") and has not revoked it in accordance with Section 21
hereof, commencing on the termination date and continuing for a period of twelve
months (hereinafter referred to as the "continuation period"), Richins shall be
paid an amount equal in rate to the base salary of $225,000 per year less
applicable deductions. Except as expressly set forth in this ESA, he shall not
be entitled to benefit from or continue to participate in any bonus, deferred
compensation, welfare or benefit plan maintained by Designs. All payments during
the continuation period shall be made consistent with Designs' regular pay
cycle.
3. (a) Richins acknowledges that his right to health insurance and related
coverages under the Consolidated Omnibus Budget Reconciliation Act ("COBRA")
becomes effective as of the termination date and will continue for a maximum of
eighteen months thereafter. Richins has informed Designs that he wants to
continue his coverage during this period and will pay the requisite premiums in
accordance with COBRA.
(b) All options which have heretofore been granted to Richins under
Designs' 1992 Stock Incentive Plan shall be exercisable in accordance with their
terms for thirty (30) days after the termination date.
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4. (a) Except as provided above, all other benefits heretofore provided by
Designs to Richins have terminated as of the termination date. Richins
acknowledges that the payments during the twelve month continuation
period, are in lieu of all other benefits and payments which otherwise may have
been payable to him as a result of his termination under benefit plans or
policies of Designs, including, without limitation, additional salary
continuation pay, stock options, bonus payments, separation pay, commission and
automobile insurance, fuel and repair costs, and he hereby waives any rights he
may have in or to any such other benefits or payments, it being the intention of
the parties hereto to convert and merge all such rights into this ESA.
(b) Without limiting the foregoing, Richins specifically waives any rights
he might have under the Agreement, which except as set forth below is hereby
terminated. Notwithstanding the foregoing, Richins reaffirms his undertakings
pursuant to Sections 9(a)(b)(c)(d), 10(a)(b), 11(a)(b) and 12 of the Agreement.
(c) Richins will not hire, and will make every reasonable effort to
dissuade any future employer from hiring any current employee of Designs or its
affiliates until July 15, 1998.
(d) The parties agree that the "Non-Competitive Period" described in
Section 9(a) of the Agreement shall expire on July 15, 1997 and further agree
that the money which Richins will receive during the continuation period will be
considered to be consideration for Richins' reaffirmation of his obligations
under this Section 4, among other considerations which Richins grants Designs in
this ESA.
5. Richins shall never apply for employment with Designs or any of its
affiliates.
6. The parties shall state that "Richins resigned from Designs because of
the personal difficulties with the drawn out relocation from his residence in
Connecticut." All requests for references by Richins' prospective employers
shall be directed by Richins, and as practical, by Designs, to Joel Reichman.
Reichman, or if he is unavailable, his designee shall respond to such requests,
in accordance with Designs' policy, by stating the periods of Richins'
employment and the positions he held during that employment. Designs shall
circulate to its designated recipients Exhibit D hereto. Richins agrees that on
and after the termination date, he will have no discussion or written
communication with Designs' employees, suppliers, analysts, consultants,
customers, financing sources or auditors concerning Designs' business
activities. Richins further confirms and agrees that all Designs' financial and
personnel data which is not publicly filed or available is proprietary to
Designs, and includes valuable trade secrets. Richins further agrees that after
the termination date he shall not enter the premises or property of Designs or
any of its affiliates, subsidiaries or related companies for any purpose at any
time unless he is specifically authorized to do so by the General Counsel of
Designs.
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7. Richins hereby agrees not to criticize, disparage or otherwise comment
negatively about, orally or in writing, directly or indirectly, Designs, its
affiliates or any of their respective past, present or future officers,
directors, employees, agents, businesses, suppliers or service providers,
products or services. He shall make no comment about his employment which shall
reflect badly upon Designs, and shall make no comment about his leaving Designs
which is inconsistent with the substance of the first sentence of Section 6
hereof. He agrees to use his best efforts to ensure that none of the members of
his family so criticize, so disparage or so reflect on any of such persons or
entities. Designs agrees that Joel Reichman, Scott Semel, Carolyn Faulkner,
Mark Lisnow and Neal Vantosky will not criticize, disparage, or comment
negatively about, orally or in writing, directly or indirectly, Richins, that
each shall make no comment about Richins' leaving Designs which is inconsistent
with the substance of the first sentence of Section 6 and that it will send the
memorandum attached hereto as Exhibit D to its listed addressees.
8. (a) Richins, for himself, his heirs, legal representatives, successors
and assigns, does hereby waive, remise, release and forever discharge Designs,
its past, present, and future directors, officers, stockholders in their
capacity as stockholders, employees, affiliates, agents and attorneys and their
respective heirs, legal representatives, successors and assigns, of and from any
and all claims, debts, demands, actions, causes of action, suits, dues, sum and
sums of money, accounts, reckonings, bonds, specialties, covenants, contracts,
controversies, agreements, promises, doings, omissions, variances, damages,
executions, liabilities and obligations (hereinafter collectively referred to as
"Claims") of every kind and nature whatsoever, at law, in equity or otherwise,
which he has, or ever had, or which he can, shall or may have, for, upon or by
reason of any matter, cause or thing whatsoever, whether known or unknown, from
the beginning of the world to and including the date hereof, including, without
limitation, all Claims which arise out of or in connection with Richins's
employment or the termination of his employment with Designs and all Claims
under the common law and the federal Age Discrimination in Employment Act,
Chapter 151B of the Massachusetts General Laws, or any such other federal or
state statute regulating the employment relationship but excluding all Claims
based on a breach of this ESA provided, however, that nothing contained in this
Section 8(a) or in this ESA shall diminish or alter any pre-existing rights
Richins may have to a defense or indemnification from Designs or any insurance
carrier with respect to any claim brought against Richins or Designs by any
third party.
(b) Designs, for itself and its successors and assigns, does hereby
waive, remise, release and forever discharge Richins, his legal representatives,
successors and assigns, of and from any and all Claims of every kind and nature
whatsoever, at law, in equity or otherwise, which it has, or ever had, or which
it can, shall or may have, for, upon or by reason of any matter, cause or thing
whatsoever, whether known or unknown, from the beginning of the world to and
including the date hereof, including, without limitation, all Claims which arise
out of or in connection with Richins' employment or the termination of his
employment with Designs and all Claims under the common law but excluding any
Claim of fraud, embezzlement, or any other improper or unlawful receipt or
retention of anything of value belonging to Designs, and further excluding all
Claims based on a breach of this ESA.
9. Richins and Designs acknowledge that they each may hereafter discover
facts in addition to or different from those which he or it now knows or
believes to be true with respect to the subject matter of this ESA, that it is
their intention hereby fully, finally and forever to waive and release all
matters released in Section 8(a) or 8(b) hereof respectively (the "released
matters") and that, in furtherance of such intention, the releases given herein
shall be and remain in effect notwithstanding the discovery or existence of any
such additional or different facts.
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10. Richins agrees that the fact and existence of this ESA and amounts paid
hereunder shall not be disclosed by Richins to any person, corporation,
organization, agency or other entity, except for his wife, his attorney, his
tax advisor and to such government authorities as required by law, and in the
case of Designs, the fact and the existence of this ESA and the amounts paid
hereunder shall not be disclosed except to its officers, stockholders,
employees and directors, having a business need to know the contents of this
ESA, its attorneys, and its accountants, and to any responsible governmental
agency, including but not limiting to the SEC.
11. Richins shall not, directly or indirectly, solicit, participate in or
bring any legal claim, action or proceeding against Designs, whether by himself
or by any person, agency, organization or entity, and shall not voluntarily
become involved or participate or cooperate in, publicly or privately, any legal
claim, action or proceeding against Designs except as required to do so by
properly issued subpoena and then only after giving Designs a reasonable
opportunity to review such subpoena and oppose the giving of such testimony.
12. Richins and Designs agrees that each shall not bring any action or
proceeding against the other arising out of or relating to Richins' employment
or the termination of his employment with Designs. If either Richins or Designs
should bring any action arising out of the subject matter of this ESA and the
other party shall prevail concerning any or all of the issues so presented, that
party shall pay all of the other party's costs and expenses of the defense of
such issue(s). If at any time Richins shall bring an action or proceeding to
challenge the validity of this ESA or any of its provisions, he shall first
repay to Designs all payments, considerations and benefits provided by Designs
to which Richins would not be entitled absent this ESA.
13. Richins warrants and represents to Designs that he has not heretofore
assigned, transferred or purported to assign or transfer, and shall not
hereafter assign or transfer or purport to assign or transfer, to any person or
entity any released matter. Richins shall indemnify and hold harmless Designs
from and against all claims, suits, actions, causes of action, liabilities,
obligations, losses, costs and expenses (including, without limitation,
attorneys' fees whether or not litigation be commenced) based on, resulting
from, in connection with, or arising out of, any such assignment or transfer or
purported assignment or transfer.
14. Richins confirms and agrees that he has returned to Designs and forever
ceased to use all originals and all copies of all notebooks, disks, tapes,
computer programs, software, reports, proposals, notes, documents and other
materials which contain any confidential or proprietary information of Designs
or its vendors or customers or which otherwise are the property of Designs.
Richins further confirms and agrees that all Designs' financial and personnel
data which is not publicly filed or available constitutes proprietary
information, including valuable trade secrets. Richins further confirms and
agrees that he has returned to Designs and forever ceased to use his office
keys, key cards, printed cards, corporate credit cards and other property which
had been in his possession and was owned by Designs or its vendors or customers,
including one Jaguar automobile and its accessories.
15. Richins acknowledges that the amounts paid hereunder are not intended
to be wages.
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16. Neither this ESA nor any provision or part hereof shall constitute, or
be construed as, an admission of liability or wrongdoing by either party hereto.
17. This ESA shall be binding upon, and inure to the benefit of, the
parties hereto and their respective heirs, legal representatives, successors
and assigns, and shall inure to the benefit of all past, present and future
directors, officers, stockholders in their capacity as stockholders, employees,
affiliates, agents and attorneys and their respective heirs, legal
representatives, successors and assigns.
18. This ESA constitutes the entire agreement between the parties
concerning the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between them concerning such subject matter,
except as specifically set forth herein.
19. This ESA 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.
20. This ESA may be executed in one or more counterparts, each of which
when so executed shall be deemed to be an original and all of which together
shall constitute one and the same agreement.
21. Richins further states that he has carefully read this ESA, that he
knows and understands the contents hereof and that he is executing this ESA as
his own free act and deed and knowingly and voluntarily waives his rights and
claims as described above. In signing this ESA, Richins acknowledges that he has
not relied on any statements or explanations made by Designs. Richins further
represents and agrees that he has consulted with an attorney of his choosing,
and that he fully understands the terms, conditions, and final and binding
effect of this ESA and the release contained herein to be a full and final
release of all Claims with final and binding effect. Richins acknowledges that
he has been given a period of at least twenty-one days within which to consider
this ESA prior to his execution hereof. Furthermore, Designs and Richins agree
that Richins shall have the right to revoke this ESA by written notice to
Designs within the seven-day period after he executes it (the "revocation
period"), and that this ESA shall not become effective or enforceable until such
seven-day revocation period has expired. In the event this ESA is revoked by
Richins in accordance with the provisions of this Section 21, notwithstanding
the immediately preceding sentence, Richins shall return to Designs all
payments, considerations and benefits provided by Designs to which Richins would
not be entitled absent this ESA.
22. Any dispute concerning the meaning, application or violation of this
ESA (but not about its validity which will be assumed by the arbitrator), shall
be submitted to final and binding arbitration as follows:
(a) Arbitration shall be conducted in accordance with the Voluntary
Labor Arbitration Rules of the American Arbitration Association ("Rules") then
in effect.
(b) All hearings will be held in Suffolk or Norfolk County in the
Commonwealth of Massachusetts.
(c) The arbitrator will be without power to add to, delete from, or
amend the provisions of this Agreement.
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(d) The costs of arbitration and the fee of the arbitrator shall be
allocated by the arbitrator. In the event that the arbitrator determines that
either party has brought a frivolous claim or has made a frivolous defense to a
valid claim, the arbitrator may award expenses, reasonable attorney's fees and
costs to the prevailing party.
(e) Except as otherwise provided herein, arbitration shall be pursuant
to the Rules. The applicable procedural law shall be Title 9 of the United
States Code, and to the extent the arbitrator resorts to general rules of
contract interpretation, he or she shall resort to the law of the Commonwealth
of Massachusetts.
IN WITNESS WHEREOF, Designs and Richins have set their hands and seals on
the date first above written.
ATTEST: DESIGNS, INC.
/s/ Scott N. Semel, EVP [Seal] By:/s/ Joel H. Reichman, President
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Its President thereunto duly
authorized
WITNESS:
/s/ Judy Richins [Seal] /s/ William D. Richins 8/7/96
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William D. Richins