Cfo Employment Agreement

EMPLOYMENT AGREEMENT


EMPLOYMENT AGREEMENT (this "Agreement"), February 1, 1999 (the "Commencement Date"), between SALANT CORPORATION, a Delaware corporation, (the "Corporation") and Awadhesh Sinha (the "Employee").


WHEREAS, the Employee and Corporation are parties to a Letter Agreement, dated May 1, 1997 (the "Letter Agreement"), and


WHEREAS, the Employee and the Corporation desire to enter into a new agreement of employment between them.


NOW THEREFORE, in consideration of the respective premises, mutual covenants and agreements of the parties hereto, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


SECTION 1. NATURE OF EMPLOYEE'S SERVICES. The Corporation agrees to employ the Employee and the Employee agrees to serve the Corporation as the senior executive officer of the Corporation, having the title, Executive Vice President and Chief Financial Officer of the Corporation. The Employee shall perform such services and duties as shall be assigned to him or delegated to him from time to time by the Chief Executive Officer of the Corporation, the Board of Directors or the Executive Committee of the Board of Directors during the Employment Period (as hereinafter defined) provided, however, that such duties shall be consistent with those customarily performed by the senior executive officer of other entities doing business in the industries in which the Corporation is primarily engaged.


The Employee's duties shall include, without additional compensation, the performance of similar services for any subsidiaries of the Corporation. The Employee agrees that, except as otherwise provided herein, he shall devote substantially all of his business time, attention and energy to the business of the Corporation and its subsidiaries in the advancement of the best interests of the Corporation and its subsidiaries. The Employee will perform his duties hereunder principally in the New York metropolitan area.


During the Employment Period it shall not be a violation of this Agreement for the Employee to (a) serve on corporate, civic or charitable boards or committees or otherwise engage in charitable activities and community affairs, (b) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (c) manage personal investments, so long as such activities do not materially interfere with the performance of Employee's responsibilities as an employee of the Corporation in accordance with this Agreement.


SECTION 2. TERM OF EMPLOYMENT. The term of Employee's employment under this Agreement shall commence on the Commencement Date and end on January 31, 2001 (the "Employment Period").


The Employment Period shall be automatically renewed for successive one-year terms (the "Renewal Terms") on the same terms set forth herein (except salary which shall be at the annual rate immediately prior to the Renewal Term) unless at least 180 days prior to the expiration of the original Employment Period or any Renewal Term, either Party notifies the other Party in writing that he or it is electing to terminate this Agreement at the expiration of the then current Employment Period. "Employment Period" shall mean the original Employment Period (i.e. the Commencement Date to January 31, 2001) and all Renewal Terms.


In the event that this Agreement is not renewed because the Corporation has given the 180-day notice prescribed in the preceding paragraph on or before the expiration of the original Employment Period or any Renewal Term, such non-renewal shall be treated as a termination following non-renewal pursuant to Section 6 (f) below.


SECTION 3. ANNUAL COMPENSATION. Subject to the terms hereof, the Corporation agrees to pay to the Employee, subject to all applicable laws and requirements, including, without limitation, laws with respect to withholding of federal, state or local taxes, the annual compensation set forth below.


(a) Salary. As annual salary for the services to be rendered by the Employee the Corporation shall pay a salary at the rate of $300,000 per annum until December 31, 1999, $325,000 for the next twelve month period of the Employment Period and $350,000 for the final twelve month period of the Employment Period, payable in equal bi-weekly installments during the Employment Period (the "Salary").


(b) Incentive Compensation. Employee shall be entitled to receive a bonus (the "Bonus") in accordance with the schedule annexed hereto as Exhibit 1 comparing the Corporation's performance during each fiscal year which ends within a particular Employment Year, to operating targets for each such fiscal year. The Employee shall not receive a minimum or guaranteed bonus for any year. Each bonus shall be paid by the Corporation to the Employee within ninety (90) days after the end of the fiscal year to which such bonus relates. If, however, the employment of the Employee is terminated or if the Employment Period terminates on a day other than the last day of a fiscal year, the bonus amount payable with respect to such fiscal year shall be determined by comparing the Corporation's performance during the period closes to a fiscal month end and the Termination Date (as defined below) with the operating targets for such period, prorated by the proportion that the number of months of employment completed by the Employee during that fiscal year bears to twelve (12) (the "Earned Bonus"). The Earned Bonus, if any shall be paid to the Employee within twenty (20) days of the Termination Date. Notwithstanding anything contained herein to the contrary, no bonus shall be payable to the Employee (i) if the Employment Period is terminated pursuant to Section 6(c) or (ii) if the Employee terminates the Employment Period other than pursuant to Section 6(e).


SECTION 4. EMPLOYEE BENEFIT PLANS. The Employee shall, during the Employment Period, be eligible to participate in and receive benefits under and in accordance with the provisions of any pension plan, welfare plan or other similar plan or policy of the Corporation maintained for the benefit of the Corporation's senior level executives or its employees generally (together, the "Benefit Plans"). In the event any new Benefit Plan is established which is in addition to, and not an alternative to, any existing Benefit Plan, the Employee shall also be entitled to participate in such Benefit Plan to the extent permitted by the terms thereof. The Corporation shall have the right, however, to make changes in Benefit Plans applicable to its senior executives or employees generally and the Employee agrees that such changes shall also be applicable to the Employee.


SECTION 5. EXPENSES AND OTHER PERQUISITES.
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(a) Subject to compliance by the Employee with such policies regarding expenses and expense reimbursement as may be adopted from time to time by the Corporation, the Employee is authorized to incur reasonable expenses in the performance of his duties hereunder in the furtherance of the business of the Corporation and its subsidiaries, and the Corporation shall reimburse the Employee for all such reasonable expenses.


(b) During the Employment Period, the Corporation will provide the Employee with an automobile allowance in the amount of $680 per month, payable with the first pay period of each month.


SECTION 6. TERMINATION.
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(a) Definition of the Termination Date. The "Termination Date" shall be the date which is earlier of (i) the last day of the Employment Period, (ii) the effective date of termination of employment as set forth in the notice which Corporation delivers to the Employee indicating that the Employee's employment hereunder is terminated, or (iii) the date on which Employee delivers written notice to the Corporation that he is terminating his employment hereunder.


(b) Termination Due to Death or Disability. In the event the Employee's employment is terminated due to his death or Disability (as hereinafter defined), he, his estate or his beneficiaries, as the case may be shall be entitled to:


(i) Salary through the date of death or disability and any Bonus for any fiscal year earned but not yet paid;


(ii) pro-rated Bonus through the date of death or Disability, payable in accordance with Section 3(b);


(iii) in the case of death only, a lump sum payment equal to three months Salary at the annual rate in effect at the date of death, paid promptly after his death;


(iv) the right to exercise all stock options granted to Employee at the time of his death or Disability (whether or not then vested) for a period of one year following such event or for the remainder of the exercise period, if shorter;


(vi) any amounts earned, accrued or owing to the Employee but not yet paid under Sections 4 or 5;


(vii) the right to receive all applicable benefits pursuant to the Corporation's Employee Long Term Disability Coverage plan (the "Plan") as if he were fully covered thereunder, provided however, if the Employee is precluded from receiving such benefits (e.g. due to the fact that he is no longer employed by the Corporation), the Corporation shall pay to Employee cash payments equal, on an after-tax basis, to the amount of benefits he would have received had he continued to be eligible to participate in the Plan; and


(viii) other or additional benefits then due or earned in accordance with applicable plans and programs of the Corporation.


For purposes of this Agreement, "Disability" shall mean any physical or mental illness which as a result thereof, the Employee is unable to discharge his duties for a period of six (6) consecutive months or for a total of 180 days during any twelve month period.


(c) Termination by the Corporation for Cause.
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(i) "Cause" shall mean:


(A) the Employee is convicted of a felony or engages in conduct which is determined by a court to constitute an act involving moral turpitude; or


(B) the Employee engages in conduct that constitutes (i) willful gross neglect, (ii) willful gross misconduct in carrying out his duties under this Agreement or (iii) a violation of the Company's Code of Conduct, resulting, in each case, in material harm to the financial condition or reputation of the Corporation.


(iii) In the event the Corporation terminates the Employee's employment for Cause he shall be entitled to:


(A) Salary through the Termination Date;


(B) any amounts earned, accrued or owing to the Employee but not yet paid under Sections 4 or 5; and


(C) other or additional benefits then due or earned in accordance with applicable plans or programs of the Corporation.


(d) Termination by the Corporation Without Cause.
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In the event the Employee's employment is terminated by the Corporation without Cause (which termination shall be effective as of the date specified by the Corporation in a written notice to the Employee), other than due to death or Disability the Employee shall be entitled to and his sole remedies under this Agreement shall be:


(i) Salary through the Termination Date;


(ii) Salary, at the annualized rate in effect on the Termination Date for a period which is the longer of twelve (12) months following such termination or the balance of the then existing Employment Period (the "Severance Period");


(iii) pro-rated Bonus for the fiscal year in which termination occurs, payable in accordance with Section 3(b);


(iv) the right to exercise any stock option held by the Employee at the Termination Date (whether or not then vested), such option to remain exercisable for six (6) months after the Termination Date, or for the remainder of the exercise period, if shorter;


(v) Any amounts earned, accrued, or owing to the Employee but not yet paid under Sections 4 or 5; and


(vi) continued participation in all medical, dental, health and life insurance plans and in other employee benefit plans or programs at the same benefit level at which he was participating on the Termination Date until the earlier of:


(A) the end of the Severance Period; or ...