SEVERANCE AGREEMENT
This severance agreement (the "Agreement") is made as
of this 5th day of November, 1995, by and between Signal
Apparel Company, Inc. ("Signal"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇") ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MW Holdings, L.P.
(collectively, the "▇▇▇▇▇▇▇ Parties").
WHEREAS, the parties wish to enter into an agreement
terminating the employment of ▇▇▇▇▇▇▇ by Signal.
NOW THEREFORE, in consideration of the promises and
covenants contained in this Agreement, the Parties agree as
follows:
1. Resignation of ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ hereby resigns
from his position as Chairman of the Board and Chief
Executive Officer of Signal and from any and all other
offices, positions and duties which he now holds with
Signal, or with any subsidiary or division thereof,
including, but not limited to positions, duties, and
responsibilities he may now hold with AMW, Inc. and The
Shirt Shed, Inc.
2. Status of Employment Agreements, Mutual Release.
The Signal Employment Agreement dated April 1, 1995,
("Signal Employment Agreement") and the AMW Employment
Agreement, February 16, 1993 (collectively, the "Employment
Agreements"), and all rights and liabilities thereunder, are
of no force and effect and each party releases the other
from any claim they may have by virtue of the Employment
Agreements or any other duties arising out of the employmennt
relationship other than as expressly reserved by this agreement,
and provided that Signal expressly does not release ▇▇▇▇▇▇▇ from
claims for indemnification or contribution brought by any third
party, as set forth in Secion 11 of this Agreement.
3. Severance Payment. Signal shall pay ▇▇▇▇▇▇▇'▇
ordinary salary as it would have been otherwise due Through
January 15, 1996 under Section 2 of the Signal Employment
Agreement. ▇▇▇▇▇▇▇ shall not be entitled to any future
salary, severance or other payments hereunder except as
specifically provided for herein.
4. Payments With Respect to Claimed Commissions.
Signal shall pay to ▇▇▇▇▇▇▇ $60,000, constituting the unpaid
portion of all commissions claimed by ▇▇▇▇▇▇▇ for sales
completed prior to the purchase of American Marketing Works,
Inc. by Signal, as follows: 6 installments of $10,000 per
month shall be paid on the first business day of each month
commencing December 1, 1995 and ending on May 1, 1996.
5. Payment on Purchase Note(s). Signal shall pay to
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MW Holdings, L.P. $44,600 in the
aggregate, which the parties hereto agree shall constitute
all of the unpaid interest owing on the Purchase Notes as of
the date of this Agreement, in seven equal monthly
installments of $5,575 on the first business day of each
month commencing on December 1, 1995 and ending on June 1,
1996 and one installment of $5,602.67 on July 1, 1996.
6. Insurance. Signal shall pay the premium on all
health insurance policies that it currently provides for the
benefit of ▇▇▇▇▇▇▇ until March 31, 1996.
7. Expenses. Subject to Signal's prior approval, it
shall reimburse ▇▇▇▇▇▇▇ for reasonable freight expenses
incurred in connection with transporting his furniture and
other household furnishings by ▇▇▇▇▇▇▇▇▇ Relocation Services
to California, and for the cost of coach airplane tickets to
California for ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and their children.
8. Return of Property. ▇▇▇▇▇▇▇ shall return all
Signal property in his possession or under his control;
provided, however, ▇▇▇▇▇▇▇ may elect, on or before November
15, 1995, to purchase the desk and chair and other furniture in
his possession and which he uses (which are owned by Signal) by
paying to Signal the sum of $1,000.
9. Conversion of Purchase Notes. Signal hereby
grants to ▇▇▇▇▇▇▇, ▇▇ Holdings, L.P. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and
▇▇▇▇▇▇▇ hereby exercises (and agrees to cause ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and MW Holdings, L.P. to immediately exercise) the right to
convert the preferred stock of Signal received upon
conversion of the Purchase Notes (as defined in that certain
Stock Purchase Agreement dated October 5, 1994 among Signal,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ Holdings, L.P. and other parties
names therein into One Million (1,000,000) shares of Common
Stock. When Signal next files a registration statement
under the Securities Act of 1933, it will use its best
efforts to include thereunder such One Million (1,000,000)
shares. If such registration does not occur within one year
from the date hereof, Signal shall thereafter use its reasonable
best efforts to register such shares by including them in any
registration which Signal may file thereafter and pay to ▇▇▇▇▇▇▇
interest calculated at the rate of 7% per annum on the value of
such One Million (1,000,000) shares as have not been registered,
with such value based on the closing price of Signal's
common stock on the New York Stock Exchange on the date of
the execution of this Agreement (or if it does not trade on
such date, on the next trading day) ("Value"). Such interest
shall be paid quarterly, one-half in cash and one-half in
Common Shares of Signal stock based on such Value, until
such shares are registered, disposed of by ▇▇▇▇▇▇▇, or until
the right to register such shares hereunder expires, which
shall be such time as ▇▇▇▇▇▇▇ can sell or transfer such shares
without registration.
10. The ▇▇▇▇▇▇ Litigation. Signal shall provide for
representation of ▇▇▇▇▇▇▇ in connection with the ▇▇▇▇▇▇
Litigation and shall indemnify him against any judgment
entered against him in that action to the full extent
required by Signal's certificate of incorporation, its by-
laws, and the laws of the State of Indiana (collectively
"Signal's Indemnity Obligation"). ▇▇▇▇▇▇▇ shall assist
Signal in the defense of the ▇▇▇▇▇▇ Litigation in any
reasonable manner requested by Signal, including but not
limited to the following:
▇. ▇▇▇▇▇▇▇ shall provide Signal with any
documents in his possession which will be of assistance in
defending the ▇▇▇▇▇▇ Litigation; and
▇. ▇▇▇▇▇▇▇ shall, if requested by Signal,
testify in the ▇▇▇▇▇▇ Litigation and shall make himself
available to Signal for witness preparation sessions.
11. Releases. ▇▇▇▇▇▇▇ hereby unequivocally releases,
acquits, covenants not to ▇▇▇ and forever discharges Signal
and its officers, directors, employees, agents, attorneys,
shareholders, heirs, assigns, successors, trustees, parents,
subsidiaries, operating divisions, affiliated companies, and
all others in the world (collectively, the "Signal
Releasees") of and from all manner of action and actions,
cause and causes of action, claims, whether known or
unknown, suits, debts, wages, sums of money, accounts,
bills, contracts, torts, controversies, agreements, damages,
judgments, expenses, attorney's fees, executions, claims
arising under any federal law and the laws of any state
(statutory, regulatory and common law) and the laws,
ordinances, statutes and common laws of all cities and other
states and provinces in the United States and the World;
provided, however, ▇▇▇▇▇▇▇ does not release Signal and its
officers, directors and employees or its agents, attorneys, or
shareholders from any such claim arising from the acquisition of
AMW, Inc., nor any claims for indemnification or contribution
arising from any claims brought by any third party, nor any
release of rights and obligations arising under this agreement or
in the future. Included specifically within this General Release
is any claim that ▇▇▇▇▇▇▇ was forced to resign or was
constructively discharged.
▇▇▇▇▇▇▇ agrees that he will not bring or attempt to
bring any other action against any Signal Releasee for any
matter arising out of his employment or resignation from
employment in any court or before any administrative agency.
Signal hereby unequivocally releases, acquits,
covenants not to ▇▇▇ and forever discharges ▇▇▇▇▇▇▇ and his
heirs, assigns or trustees and all others in the world
(collectively, the "▇▇▇▇▇▇▇ Releasees") of and from all
manner of action and actions, cause and causes of action,
claims, whether known or unknown, suits, debts, wages, sums
of money, accounts, bills, contracts, torts, controversies,
agreements, damages, judgments, expenses, attorney's fees,
executions, claims arising under any federal law and the
laws of any state (statutory, regulatory and common law) and
the laws, ordinances, statutes and common laws of all cities
and other states and provinces in the United States and the
World; provided, however, that Signal does not release the
▇▇▇▇▇▇▇ Releasees from any such liability arising from the
acquisition of AMW, nor from any such liability resulting
from claims for indemnification or contribution brought by
any third party, except to the extent required by Signal's
indemnity obligations, based upon his actions as an officer
or director of Signal, nor from any liability as may be incurred
by ▇▇▇▇▇▇▇ in connection with the rights and obligations created
by this agreement or in the future.
Signal agrees that it will not bring or attempt to
bring any other action against any ▇▇▇▇▇▇▇ Releasee for any
matter arising out of his employment by Signal or
resignation from such employment in any court or before any
administrative agency.
12. Confidentiality. The parties agree to maintain
this Agreement (including the exhibits hereto), its terms
and the negotiations related hereto in confidence, without
any disclosure to third parties except that a disclosure may
be made:
a. by any Party to the extent necessary in a
proceeding to enforce the Agreement;
b. by any Party to the extent required by law;
and
c. by any Party on obtaining the prior written
consent of all other Parties.
The parties acknowledge that this Agreement will be
filed as an exhibit to Signal's next Quarterly Report on
Form 10-Q; and the parties agree that, unless otherwise
required by law, Annex A hereto shall be the only public
statement made concerning this Agreement and the termination
of ▇▇▇▇▇▇▇'▇ employment.
Furthermore, in accordance with Section 7 of the Signal
Employment Agreement, the ▇▇▇▇▇▇▇ Parties shall not, without
prior written consent of Signal, communicate or divulge any
confidential information to anyone other than Signal and
those designated by it. For purposes of this provision, the
term confidential information includes all secret or
confidential information, knowledge or data relating to
Signal which shall not be or become public knowledge (other
than by acts by ▇▇▇▇▇▇▇ or representatives of ▇▇▇▇▇▇▇ in
violation of this Agreement.
13. Choice of Law and Venue. This Agreement shall be
deemed to be a contract entered into pursuant to the laws of
the State of New York which shall, in all respects, be
governed, construed, applied and enforced in accordance with
the substantive laws of the State of New York without
reference to conflict of law principles. Any controversies
arising out of this Agreement shall be resolved in the
courts located in the Southern District of New York and the
parties hereto submit to the jurisdiction thereof.
14. Use of Settlement Agreement. This Agreement shall
not be construed, considered or used as an admission of
liability or fault on the part of any Party, which liability
or fault all Parties expressly deny. Moreover, this
Agreement should not be construed as to release any claims
that Signal or the ▇▇▇▇▇▇▇ Parties may have against any
third party.
15. Necessary Documents. The Parties agree to enter
into and execute such further documents or instruments as
may be necessary and appropriate to effectuate this
Agreement.
16. Power and Authority to Execute. Each Party hereto
represents and warrants that it has the full power and
authority to execute, deliver and perform this Agreement,
that each individual signing on behalf of a party has been
duly authorized by that party to execute this Agreement on
its behalf and that no claims being released under the terms
of this Agreement have been assigned, sold or otherwise
transferred to any other entity.
17. Successors-In-Interest Bound. This Agreement
shall be binding upon and shall insure to the benefit of,
the Parties and their respective officers, directors,
affiliates, attorneys, administrators, agents,
representatives, successors and assigns.
18. Advice of Counsel. Each of the Parties has had
the benefit of the advice of counsel of its own choice in
the negotiating, drafting and execution of this Agreement,
and the language in all parts of this Agreement is a product
of the efforts of all counsel. Accordingly, neither the
entire Agreement nor any provision contained herein shall be
deemed to have been proposed or drafted by any party or
constructed against an party. This Agreement shall be
construed as a whole according to its plain meaning.
19. Entire Agreement of the Parties. This Agreement
and the documents annexed hereto constitute the entire
agreement and understanding among the Parties with respect
to the subject matter hereof. This Agreement supersedes all
prior agreements and understandings, both written and oral,
concerning such matters. Moreover, each party represents
and warrants that it has entered into this Agreement wholly
upon its own volition, judgment, belief and knowledge and
without any duress or reliance upon any statement or
representation of another party except those representations
and warranties expressed in this Agreement.
20. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall
be an original, but all of which when taken together shall
constitutes one and the same instrument. This Agreement
shall be of no force and effect until executed by all
Parties hereto.
21. Validity of Agreement. Each Party represents and
warrants that this Agreement is a legal, valid and binding
obligation, enforceable in accordance with its terms and
that there are no laws, rules or regulations that prohibit
its enforceability.
22. No Waiver. No waiver of any right under this
Agreement shall be deemed effective unless contained in a
writing executed by the Party charged with such waiver, and
no waiver of any breach of failure perform shall be deemed
to be a waiver of any future breach or failure to perform or
of any other provision of this Agreement. This Agreement
may not be amended except in a document signed by the Party
to be charged.
23. Headings. The headings contained herein are for
reference only and are not a part of this Agreement and
shall not be used in connection with the interpretation of
this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed
this Agreement as of this 5th day of November, 1995.
Date: November 5, 1995
SIGNAL APPAREL COMPANY, INC.
By:/s/▇▇▇▇▇ ▇▇▇▇▇
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MW HOLDINGS, L.P.
By:/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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19527V.01!
Annex A
PRESS RELEASE
SIGNAL APPAREL COMPANY, INC. Contact:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Executive Vice President
(▇▇▇) ▇▇▇-▇▇▇▇
Signal Apparel Company, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ jointly
announced today ▇▇. ▇▇▇▇▇▇▇'▇ decision to step down as
Chairman of the Board and Chief Executive Officer of the
Company. ▇▇. ▇▇▇▇▇▇▇ will remain a substantial shareholder
in the Company.
In announcing the decision, ▇▇. ▇▇▇▇▇▇▇ stated that he
had established several key Company objectives when he
joined the company in late 1994. First and foremost of
these objectives was the rebuilding of the Signal management
team in order to position the Company for growth and
profitability. "With the addition of ▇▇▇▇▇ ▇▇▇▇▇ in August,
1995 as President and Chief Operating Officer and with key
management changes in the Operations, Sales, Design and
Merchandising areas, Signal has one of the top management
teams in the active apparel industry," stated ▇▇. ▇▇▇▇▇▇▇ in
announcing his decision. "The Company has successfully
consolidated its operations, boosted operating efficiencies,
cut unnecessary overhead, and developed many new major
licensing initiatives. It is time to let ▇▇▇▇▇ ▇▇▇▇▇ manage
the company and implement the strategic plans which have
been developed by the new management team over the last six
months," added ▇▇▇▇▇▇▇.
▇▇. ▇▇▇▇▇▇▇ is planning to pursue several different
opportunities, and an announcement in this regard is
anticipated in the coming month.
Signal Apparel Company, Inc. is engaged in the manufacture
and marketing of apparel. The Company's Common Stock is
traded on the New York Stock Exchange under the symbol SIA.