FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT is made as of the 17th day of May, 2000, by and
among DANIEL H. LEVY (the "Executive"), DONNKENNY APPAREL, INC., a Delaware
corporation (the "Company") and DONNKENNY, INC., a Delaware corporation which
is the parent of the Company ("Donnkenny")
W I T N E S S E T H:
WHEREAS, Executive, the Company and Donnkenny entered into that
certain Employment Agreement dated as of June 1, 2000, pursuant to which
Executive was employed as Chairman of the Board and Chief Executive Officer of
the Company and each of its subsidiaries as well as in the capacity of Chief
Executive Officer of Donnkenny (the "Employment Agreement"); and
WHEREAS, the parties to the Employment Agreement deem it to be in their
mutual best interests to amend the Employment Agreement in certain respects in
recognition of the desire of the parties to solidify their respective
relationships on a long-term basis.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, effective immediately
the Employment Agreement is hereby amended as follows:
1. Section 3 of the Employment Agreement is amended by adding the
following new Section 3.j:
j. MOVING EXPENSES. The Company shall, within thirty (30)
days after request by the Executive, either directly pay or reimburse
Executive for each of (i) brokerage commissions paid or payable by
Executive in connection with relocating his current residence from
Apartment 38H, 641 5th Avenue, New York, New York (the "Current
Apartment") to another apartment residence in New York City selected
by Executive (the "New Apartment"); provided, however, that in no
event shall the Company's obligation respecting the payment of
brokerage commissions exceed fifteen percent (15%) of annual rent for
the New Apartment; and (ii) in the event that the rental term of the
Current Apartment shall overlap the rental term of the New Apartment
(the "Overlap Period"), the Company shall pay, during the overlap
Period, the lesser of the rent for the Current Apartment and the rent
for the New Apartment; and (iii) the federal, state and local income
taxes for which Executive is liable on account of the payments
referred to in Section 3j(i) and (ii) above, together with an amount
sufficient to satisfy any additional federal, state or local income
taxes for which Executive is liable on account of the amounts
received pursuant to this Section 3.j (iii). Subsequent to the date
Executive shall terminate occupancy of the Current Apartment during
the current lease term therefor, Executive shall use his reasonable
best efforts, subject to the terms of the lease for the Current
Apartment, to make the Current Apartment available to the Company for
use as a Company apartment. In the event the Company shall utilize
the Current Apartment as a Company apartment during the current lease
term, the Company shall indemnify, defend and hold Executive harmless
from and against any and all losses, liabilities, costs, damages
(including, without limitation, property damage, wrongful death or
personal injury), penalties, fines, fees and expenses including,
without limitation, reasonable legal fees and litigation expenses,
suffered, sustained or incurred by Executive as a result of, in
connection with or relating to, or alleged to result from, in
connection with
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or in relation to, any breach of lease or acts or omissions associated
with the occupancy of the Current Apartment.
2. Section 4 of the Employment Agreement is amended by deleting the
third sentence of such Section in its entirety and by substituting the
following revised third sentence of such Section in its stead:
In addition to and without limiting the generality of the foregoing,
(i) the Company (x) may obtain and maintain a "key man" life insurance
policy under which the Company is the named beneficiary in the amount
of $2,500,000, and (y) shall promptly obtain and maintain a term life
insurance policy in the amount of $2,500,000, which policy shall be
owned by the Executive, in each case from a nationally-recognized
insurance carrier reasonably acceptable to the Executive, and (ii) the
Company shall provide, in addition to any such insurance regularly
provided to the Company's executives and/or employees, long-term
disability insurance which will pay at least sixty percent (60%) of
Executive's Base Salary until the Executive reaches age 65.
Section 4 of the Employment Agreement is further amended by deleting from the
last sentence of such Section the words, "or on or after December 31, 2000."
3. Section Sb. of the Employment Agreement is amended by deleting from
the second paragraph of such Section the phrase, "In the event Executive shall
become disabled or shall die on or after December 31, 2000, then the", and by
substituting the word, "The", in its stead.
4. Section Sc.l of the Employment Agreement is deleted in its
entirety, and the following new Section Sc.l is substituted in its stead:
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c. By the Company Without Cause.
i. The Company may only terminate the employment of
the Executive for Cause or upon the death or disability of
the Executive. If the employment of the Executive shall be
terminated without Cause and other than as a result of death
or disability of the Executive then, within thirty (30) days
after such termination, in addition to any amounts payable,
or benefits provided for in Section 5c.ii. below, or as
otherwise specifically provided for in this Employment
Agreement, the Company shall pay to the Executive, by wire
transfer of immediately available funds, an amount which is
equal to the greater of (x) the aggregate Base Salary
Executive would have been entitled to receive following such
termination through the end of the term hereof (including
any renewals or extensions) or (y) one year's annual Base
Salary which is in effect on the date such employment
terminates. The Executive shall have no obligation
whatsoever to mitigate any damages, costs or expenses
suffered or incurred by the Company or Donnkenny with
respect to the severance obligations set forth in this
Section 5c.1., and no such severance payment which is
received or receivable by the Executive shall be subject to
any reduction, offset, rebate or repayment as a result of
any subsequent employment or other business activity by the
Executive including, without limitation, self employment.
5. Section 5c.ii. of the Employment Agreement is amended by
deleting the phrase, "on or after December 31, 2000" from the second line of
such Section.
6. Section 5d.v. of the Employment Agreement is amended by deleting
from the third sentence of such Section the phrase, "if such termination
occurs on or after December 31, 2000,".
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7. Section Se. of the Employment Agreement is amended by deleting
from such Section the words, "as of the December Termination Date".
9. Except as is specifically provided for in this First Amendment to
Employment Agreement, the Employment Agreement shall remain unamended and in
full force and effect in accordance with its original terms; provided,
however, that any prior ancillary letter agreements or other understandings
entered into between Executive and the Company or Donnkenny with respect to
the Employment Agreement or Executive's employment by the Company or Donnkenny
including, without limitation, the letter from Executive to Donnkenny dated
February 9, 2000 purporting to amend Section 5d.vi. of the Employment
Agreement upon the occurrence of a certain Change of Control, shall be deemed
immediately terminated, cancelled, superseded hereby and of no further force
or effect.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this First Amendment to Employment Agreement as of the day and year first
above written.
DONNKENNY, INC., a Delaware
corporation
By: /s/Lynn Siemers-Cross
-------------------------------
Name:Lynn Siemers-Cross
Title:PRESIDENT, CHIEF
OPEERATING OFFICER
DONNKENNY APPAREL, INC., a
Delaware corporation
By: /s/Lynn Siemers-Cross
------------------------------
Name:Lynn Siemers-Cross
Title:PRESIDENT, CHIEF
OPEERATING OFFICER
EXECUTIVE
/s/Daniel H. Levy
-----------------------------------
DANIEL H. LEVY
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