EXHIBIT 10(a)(1)
EMPLOYMENT AGREEMENT
AGREEMENT made and entered into as of May 1, 1998 (the "Agreement") by and
between TEXFI INDUSTRIES, INC., a Delaware corporation with offices at 0000
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx ("Texfi" or the "Company") and XXXXXX
X. XXXXXXXXX ("Xxxxxxxxx").
W I T N E S S E T H :
WHEREAS, Texfi desires to employ Xxxxxxxxx and to enter into the Agreement
embodying the terms of such employment; and
WHEREAS, Xxxxxxxxx desires to accept such employment and to enter into
the Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties agree that the following provisions shall
constitute the Agreement:
1. Employment. Texfi hereby employs Xxxxxxxxx and Xxxxxxxxx hereby accepts
employment with Texfi for the term set forth in Section 2 below, and upon the
other terms and conditions hereinafter stated.
2. Term. Unless otherwise terminated as hereinafter provided, the term of
the Agreement shall commence on May 1, 1998, and shall continue through April
30, 2001.
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3. Position, Duties, Responsibilities, Extent of Services.
3.1. Position. It is intended that, at all times during the term of the
Agreement, Xxxxxxxxx shall serve as Chief Financial Officer and Executive Vice
President of Texfi. In accordance with such position, he is hereby granted
appropriate responsibilities, duties and authorities, subject to the direction
of the Chief Executive Officer and the President and Chief Operating Officer of
the Company.
3.2. Extent of Services. During his employment under this Agreement,
Xxxxxxxxx shall devote his full time and attention to the business and affairs
of Texfi; provided, however, that nothing in this Agreement shall preclude
Xxxxxxxxx from engaging in charitable and civic activities or from managing his
personal investments so long as such outside activities do not unreasonable
interfere with the performance of his duties and responsibilities under this
Agreement.
4. Salary. For services rendered by him under this Agreement, Xxxxxxxxx
shall receive a base salary at the annual rate of $225,000 (the "Base Salary"),
payable at least in equal monthly installments, or such other amount as Texfi
and Xxxxxxxxx may agree to from time to time
5. Bonus. Xxxxxxxxx will be eligible to participate in the Texfi Executive
Incentive Bonus Program - fiscal annual bonus opportunity of up to 75% of base
salary. Xxxxxxxxx is guaranteed a fiscal 1998 (11/1/97 - 10/31/98) bonus of
$50,000 for the six-month period 5/1/98-10/31/98, which will be considered
earned as of November 1, 1998 and will be paid on December 1, 1998. Thereafter,
the actual incentive bonus amount will be based upon the performance of Texfi
for the year.
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5.1. Stock Options. Texfi hereby grants to Xxxxxxxxx stock options of
the Company in the amount of 35,000 shares of common stock. Such options shall
expire on a date five (5) years from the date of this Agreement.
6. Employee Benefit Plans. Xxxxxxxxx will be provided employee benefit
programs comparable to those being provided by Texfi to senior executive
officers during the term of the Agreement.
7. Reimbursable Expenses.
7.1. Business Expenses. During the term of his employment hereunder,
Xxxxxxxxx shall be entitled to receive proper reimbursement for all reasonable
out-of-pocket expenses incurred by him (in accordance with the policies and
procedures established by Texfi for its senior executive officers) in performing
services hereunder, provided Xxxxxxxxx properly accounts therefor.
7.2. Automobile. During the term of this employment hereunder, Texfi
will pay to Xxxxxxxxx an automobile allowance of $500 per month.
8. Termination of Employment.
8.1. Death. In the event of the death of Xxxxxxxxx during the during
the term of this Agreement, the following payments shall be made to his
designated beneficiary or, in the absence of such designation, to his estate:
(a) his Base Salary, as provided in Section 4, through the end of the month in
which death occurs, and (b) any amounts due under Incentive Bonus Plans then in
effect in accordance with the terms of such plans.
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8.2. Long-Term Disability. In the event that Xxxxxxxxx shall suffer an
illness or mental or physical disability or incapacity of such a nature, degree
or effect that he is unable to perform his duties hereunder for a continuous
period of six (6) months or for shorter periods aggregating six (6) months
within any 12-month period, the Company, at its sole option, may terminate his
employment and this Agreement. Upon such termination, Xxxxxxxxx shall be
entitled to payment of (a) his Base Salary, as provided in Section 4, through
the end of the pay period in which the termination occurs, and (b) any amounts
due under Incentive Bonus Plans then in effect in accordance with the terms of
such plans.
8.3. For Cause. The Company shall have the right to terminate the
employment of Xxxxxxxxx and this Agreement for "cause." For purposes of this
Agreement, "cause" shall mean: (i) Xxxxxxxxx'x willful and continued failure to
perform substantially his duties under this Agreement (other than by reason of
illness or mental or physical disability or incapacity) for more than 60 days
after a written demand for substantial performance is delivered to him by the
Board of Directors of the Company; which demand specifically identifies the
manner in which Xxxxxxxxx has not substantially performed his duties; (ii) theft
or misappropriation by Xxxxxxxxx of assets of the Company; or (iii) actions by
Xxxxxxxxx which constitute an act of moral turpitude or that materially injure
the Company. If Xxxxxxxxx'x employment is terminated for cause, he shall be
entitled to his Base Salary, as provided in Section 4, through the end of the
pay period in which the termination occurs.
8.4. Without Cause. Notwithstanding any other term or provision of this
Agreement, the Company may terminate Xxxxxxxxx'x employment and this Agreement
at any time and for whatever reason(s) it deems appropriate. In the event such
termination by the Company
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occurs and is not due to disability pursuant to Section 8.2 or for cause
pursuant to Section 8.3, Xxxxxxxxx shall be entitled to payment of (a) his Base
Salary, as provided in Section 4, for the greater of six (6) months from the
date of termination or the remaining term of this Agreement, and (b) any amounts
due under Incentive Bonus Plans then in effect in accordance with the terms of
such plans.
8.5. Voluntary Termination. Xxxxxxxxx may voluntarily terminate his
employment with the Company on at least 60 days' written notice.
9. Acceleration of Stock Options. All outstanding and unexpired stock
options held by Xxxxxxxxx that are not then exercisable shall become
exercisable, in whole or in part, for a period of sixty (60) days following
termination of employment pursuant to Section 8.4.
10. Covenants Not to Compete.
10.1. Competition; Soliciting Customers. Xxxxxxxxx promises and agrees
that, until the later of (a) the termination of the Agreement or (b) the
expiration of any salary payments made to Xxxxxxxxx pursuant to Section 8.4, he
will not, directly or indirectly:
(i) own, manage, operate, control, be employed by, render
advisory services to, participate in or be connected in any way with
any management or control of any business in the United States that
is engaged in competition with Texfi or any of its subsidiaries or
affiliates in the commission dying and finishing of textile products
or the manufacture and/or sale of textile products of the same or a
like nature to the products of Texfi and its subsidiaries, or
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(ii) influence or attempt to influence any customer of Texfi
or any of its subsidiaries or affiliates to divert its purchases of
woven or knit fabrics or other products to any individual,
partnership, firm, corporation or other entity then in competition
with Texfi or any of its subsidiaries or affiliates.
For purposes of this Section 10.1, "competition with Texfi or any of its
subsidiaries or affiliates" shall mean direct competition for customers of
textile products or services in any geographic area in which Texfi or any of its
subsidiaries or affiliates is engaged, directly or indirectly, in selling or
attempting to sell such products or services.
10.2. Soliciting Employees; Interference. Xxxxxxxxx promises and agrees
that, for a period of one (1) year after the later of (a) the termination of the
Agreement, or (b) the expiration of any salary payments made to Xxxxxxxxx
pursuant to Section 8.4, he will not, directly or indirectly:
(i) Solicit any employee of Texfi or any subsidiary or
affiliate of Texfi, who earned annually $25,000 or more as an
employee during the last six months of Xxxxxxxxx'x employment by
Texfi, to work for any business, individual, partnership, firm,
corporation or other entity then in competition with the business of
Texfi or any of its subsidiaries or affiliates; or
(ii) Wrongfully interfere with, disrupt or attempt to disrupt
the relationship, contractual or otherwise, between Texfi and any
other party, including without limitation any supplier, distributor,
lessor or lessee, licensor or licensee.
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10.3. Scope. Xxxxxxxxx acknowledges and agrees that the covenants set
forth in Sections 10.1 and 10.2 shall be enforceable in accordance with their
terms notwithstanding any termination of the Agreement or his employment by
Texfi, for any reason whatsoever, including without limitation, the termination
of his employment under the circumstances described in Sections 8.3, 8.4, and
8.5; and the obligations set forth in Sections 10.1 and 10.2 shall continue as
therein provided irrespective of whether payments are required by Texfi to
Xxxxxxxxx under the Agreement except that Xxxxxxxxx shall not be bound by said
covenants if Texfi fails to make any payments which, under the terms of the
Agreement, it has agreed to make to Xxxxxxxxx after the termination of his
employment.
10.4. Savings Clause. It is the desire and intent of the parties that
the provisions of Sections 10.1 and 10.2 shall be enforced to the fullest extent
permitted under the laws and public policies of each jurisdiction in which
enforcement is sought. Accordingly, if any particular portion of Sections 10.1
and/or 10.2 shall be adjudicated to be invalid or unenforceable, such
adjudication shall apply only with respect to the operation of that portion in
the particular jurisdiction in which such adjudication is made, and all other
portions shall continue in full force and effect.
11. Confidential Information; Rights to Materials.
11.1. Confidential Information. Xxxxxxxxx agrees not to disclose,
either while in Texfi's employ or at any time thereafter to any person not
employed by Texfi, or engaged to render services to Texfi, any confidential
and/or proprietary information of Texfi obtained by him while in the employ of
Texfi, including, without limitation, any of Texfi's methods, processes,
techniques, shop practices, formulae, research data, marketing and sales
information, personnel data, customer lists, financial data, plans, and all
other know-how, trade secrets and proprietary information of
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Texfi; provided, however, that this provisions shall not preclude Xxxxxxxxx from
use or disclosure of information known generally to the public (other than
information known generally to the public as a result of a violation of this
Section 11.1 by Xxxxxxxxx), from use or disclosure required by law or court
order, or from disclosure appropriate and in the ordinary course of carrying out
his duties and authorities hereunder (e.g., disclosure to Texfi's outside
accountants, bankers or trade creditors of financial data properly requested by
such persons).
11.2. Rights to Materials. Xxxxxxxxx also agrees that, upon termination
of his employment for whatever reason, he will not take with him, without the
prior written consent of an officer authorized to act in the matter by the Board
of Directors, any records, files, memoranda, reports, price lists, customer
lists, drawings, plans, sketches, documents, specifications, and the like (or
any copies thereof) relating to the business of Texfi.
12. Assignment by Texfi. This Agreement shall be binding upon and shall
inure to the benefit of Texfi or any corporation or other entity to which Texfi
may transfer all or substantially all of its assets and business (by operation
of law or otherwise) and to which Texfi may assign this Agreement, in which case
"Texfi," as used herein, shall mean such transferee corporation or other entity.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws and judicial decisions of the State of North Carolina.
14. Entire Agreement. This Agreement contains all of the understandings
and agreements of the parties hereto with respect to the employment of Xxxxxxxxx
by the Company and supersedes all prior understandings and agreements between
the parties, whether oral or in writing.
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15. Amendment; Waiver. No provision of this Agreement may be amended,
modified or waived unless such amendment, modification or waiver is agreed to in
writing and signed by Xxxxxxxxx and by an officer of the Company duly authorized
to sign by the Board of Directors of the Company. No waiver by either party
hereto of any breach by the other of any provision of this Agreement to be
performed by such other party shall be deemed a waiver of a similar or
dissimilar provision at the same time or at any prior or subsequent time.
16. Severability. If any one or more of the provisions contained in this
Agreement shall be invalid, illegal, or unenforceable in any respect under
applicable law, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
17. Withholding. Anything herein to the contrary notwithstanding, all
payments made by the Company hereunder shall be subject to the withholding of
such amounts relating to taxes as the Company may reasonably determine it should
withhold pursuant to any applicable law or regulation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the 1st day of May, 1998.
TEXFI INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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President
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
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