EXHIBIT (10g)
EMPLOYMENT AGREEMENT
BY AND BETWEEN
XXXXX X. XXXXX
AND
UNIFI, INC.
Effective January 23, 2002
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is effective January 23, 2002
(the "Effective Date") by and between UNIFI, INC., a New York Corporation (the
"Company"), and XXXXX X. XXXXX (the "Executive");
WITNESSETH:
WHEREAS, Executive is presently serving as President and Chief
Executive Officer of the Company and is an integral part of the Company's
management; and
WHEREAS, Executive became an employee of the Company in 1984, served as
President of Unifi Textured Yarns Europe (UTYE) in Ireland from October 1997
until January 20, 1999, when he moved to the U.S. and became President and Chief
Operating Officer of the Company; and
WHEREAS, Executive was elected a Director of the Company by the Board
of Directors on July 22, 1999, and by the Shareholders on October 21, 1999, and
was elected President and Chief Executive Officer of the Company in January
2000; and
WHEREAS, Executive, through his knowledge and experience in the textile
business is exceptionally well qualified, fitted and equipped to continue to
serve the Company as its President and Chief Executive Officer; and
WHEREAS, the Company deems it to be in its best interest to retain the
unique experience, ability and leadership of the Executive as its President and
Chief Executive Officer in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the Company and the Executive hereby agree as follows:
1. EMPLOYMENT. The Company hereby agrees to continue to employ the
Executive, and the Executive agrees to continue to serve the Company, in the
capacities described herein during the Period of Employment (as defined in
Section 2 of this Agreement), in accordance with the terms and conditions of
this Agreement.
2. PERIOD OF EMPLOYMENT. The term "Period of Employment" shall mean the
period which commences on the Effective Date and, unless earlier terminated
pursuant to Section 6, ends on December 31, 2005; provided, however, that the
Period of Employment shall automatically be extended on a day by day basis so
that the remaining term of the Period of Employment shall always be three (3)
years until such date as either the Company or the Executive shall have
terminated such automatic extension provision by giving written notice to the
other.
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3. DUTIES DURING THE PERIOD OF EMPLOYMENT.
3.1 DUTIES. During the Period of Employment, the Executive shall be
employed as the President and Chief Executive Officer of the Company with
overall charge and responsibility for the business and affairs of the Company.
The Executive shall report to the Company's Board of Directors (the "Board")
through its Chairman (the "Chairman") and shall perform such duties as the
Executive shall reasonably be directed to perform by the Board.
3.2 SCOPE. During the Period of Employment, the Executive shall
devote substantially all of his business time and attention to the business and
affairs of the Company. It shall not be a violation of this Agreement for the
Executive to (I) serve on corporate, civic or charitable boards or committees,
(ii) deliver lectures, fulfill speaking engagements or teach occasional courses
or seminars at educational institutions, or (iii) manage personal investments,
so long as such activities under clauses (I), (ii) and (iii) do not interfere,
in any substantial respect, with the Executive's responsibilities hereunder.
4. COMPENSATION AND OTHER PAYMENTS.
4.1 SALARY. During the Period of Employment, the Company shall pay
the Executive an annualized base salary of not less than seven hundred fifty
thousand dollars ($750,000.00) per year (the "Base Salary"). The Executive's
Base Salary shall be paid in accordance with the Company's payroll policy. The
Compensation Committee of the Board ("Committee") shall review the Base Salary
on an annual basis during the Period of Employment. Based upon such reviews, the
Committee may increase, but shall not decrease, the Base Salary. Any increase in
Base Salary shall not serve to limit or reduce any other obligation to the
Executive under this Agreement.
4.2 OTHER COMPENSATION. The Board may at its discretion award the
Executive other additional compensation and bonuses during the Period of
Employment.
5. OTHER EXECUTIVE BENEFITS.
5.1 REGULAR REIMBURSED BUSINESS EXPENSES. The Company shall promptly
reimburse the Executive for all expenses and disbursements reasonably incurred
by the Executive in the performance of his duties hereunder during the Period of
Employment.
5.2 BENEFIT PLANS. The Executive and his eligible family members
shall be entitled to participate on terms no less favorable to the Executive
than the terms offered to other senior executives of the Company in any group
and/or executive life, hospitalization or disability insurance plan, health
program, vacation policy, 401(k) plan and similar benefit plans (qualified,
non-qualified and supplemental) or other fringe benefits (it being understood
that items such as stock options are not fringe benefits) of the Company
(collectively referred to as the "Benefits). Anything contained herein to the
contrary notwithstanding, the Benefits described herein shall not duplicate
benefits made available to the Executive pursuant to any other provision of this
Agreement.
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6. TERMINATION.
6.1 DEATH OR DISABILITY. This Agreement and the Period of Employment
shall terminate automatically upon the Executive's death. If the Company
determines in good faith that the Disability of the Executive has occurred
(pursuant to the definition of "Disability" set forth below), it may give to the
Executive written notice of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the thirtieth (30th) day after receipt by the Executive
of such notice given at any time after a period of one hundred twenty (120)
consecutive days of Disability or a period of one hundred eighty (180) days of
Disability within any twelve (12) consecutive months, and, in either case, while
such Disability is continuing ("Disability Effective Date"); provided that,
within the thirty (30) days after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For purposes of
this Agreement, "Disability" means the Executive's inability to substantially
perform his duties hereunder, with reasonable accommodation as reasonably
determined by the Board. Until the Disability Effective Date, the Executive
shall be entitled to all compensation provided for under Section 4 hereof. It is
understood that nothing in this Section 6.1 shall serve to limit the Company's
obligations under Section 7.2 hereof.
6.2 BY THE COMPANY FOR CAUSE. During the Period of Employment, the
Company may terminate the Executive's employment immediately for "Cause." For
purposes of this Agreement, "Cause" shall mean that (i) the Executive has been
convicted of a felony involving theft or moral turpitude, or (ii) engaged in
conduct that constitutes willful gross neglect or willful gross misconduct with
respect to employment duties which results in material economic harm to the
Company; provided, however, that for the purposes of determining whether conduct
constitutes willful gross misconduct, no act on Executive's part shall be
considered "willful" unless it is done by the Executive in bad faith and without
reasonable belief that the Executive's action was in the best interests of the
Company. Notwithstanding the foregoing, the Company may not terminate the
Executive's employment for Cause unless (i) a determination that Cause exists is
made and approved by a majority of the Company's Board of Directors, (ii) the
Executive is given at least ten (10) days written notice of the Board meeting
called to make such determination, and (iii) the Executive is given the
opportunity to address such meeting.
6.3 BY EXECUTIVE FOR GOOD REASON. During the Period of Employment,
the Executive's employment hereunder may be terminated by the Executive for Good
Reason upon fifteen (15) business days' written notice. For purposes of this
Agreement, "Good Reason" shall mean, without the Executive's consent:
6.3.1. Assignment to the Executive of any duties inconsistent in
any material respect with the Executive's position (including status, offices,
titles and reporting relationships), authority, duties or responsibilities as
contemplated by Section 3 of this Agreement, or any other action by the Company
which results in a significant diminution in such position, authority, duties or
responsibilities, excluding any isolated and inadvertent action not taken in bad
faith and which is remedied by the Company within ten business (10) days after
receipt of notice thereof given by the Executive;
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6.3.2. Any failure by the Company to comply with any of the
provisions of Section 4 or 5 of this Agreement other than an isolated and
inadvertent failure not committed in bad faith and which is remedied by the
Company within ten business (10) days after receipt of notice thereof given by
the Executive;
6.3.3. Delivery by the Company of a notice discontinuing the
automatic extension provision of Section 2 of this Agreement; or
6.3.4. Any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement.
6.4 OTHER THAN FOR CAUSE OR GOOD REASON. The Executive or the
Company may terminate this Agreement for any reason other than for Good Reason
or Cause, respectively, upon the Executive providing the Company with ninety
(90) days written notice and upon the Company providing the Executive thirty
(30) days written notice. If the Executive terminates the Agreement for any
reason, he shall have no liability to the Company or its subsidiaries or
affiliates as a result thereof. If the Company terminates the Agreement, or if
the Agreement terminates because of the death of the Executive, the obligations
of the Company shall be as set forth in Section 7 hereof.
6.5 NOTICE OF TERMINATION. A Notice of Termination shall communicate
any termination by the Company or by the Executive to the other party hereto
given in accordance with Section 13.b. of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (I) indicates
the specific termination provision in this Agreement relied upon, (ii) sets
forth in reasonable detail, if necessary, the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated, and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination
date. The failure by the Executive or Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of the basis
for termination shall not waive any right of such party hereunder or preclude
such party from asserting such fact or circumstance in enforcing his or its
rights hereunder.
6.6 DATE OF TERMINATION. "Date of Termination" means the date
specified in the Notice of Termination; provided, however, that if the
Executive's employment is terminated by reason of death or Disability, the Date
of Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
7. OBLIGATIONS OF THE COMPANY UPON TERMINATION. The following
provisions describe the obligations of the Company to the Executive under this
Agreement upon termination of his employment. However, except as explicitly
provided in this Agreement, nothing in this Agreement shall limit or otherwise
adversely affect any rights which the Executive may have under applicable law,
under any other agreement with the Company, or under any compensation or benefit
plan, program, policy or practice of the Company.
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7.1 TERMINATION BY THE COMPANY FOR CAUSE OR RESIGNATION WITHOUT GOOD
REASON. In the event this Agreement terminates by reason of the termination of
the Executive's Employment by the Company for Cause or by reason of the
resignation of the Executive other than for Good Reason, the Company shall pay
to the Executive all Accrued Obligations (as defined below) in a lump sum in
cash within thirty (30) days after the Date of Termination. "Accrued
Obligations" shall mean, as of the Date of Termination, the sum of (A) the
Executive's Base Salary through the Date of Termination to the extent not
theretofore paid, (B) the amount of any bonus, incentive compensation, and other
cash compensation accrued by the Executive as of the Date of Termination to the
extent not theretofore paid and (C) any vacation pay, expense reimbursements and
other cash entitlements accrued by the Executive as of the Date of Termination
to the extent not theretofore paid.
7.2 RESIGNATION WITH GOOD REASON; TERMINATION WITHOUT CASE;
DISABILITY. If (I) the Company shall terminate the Executive's employment other
than for Cause, (ii) the Executive shall terminate his employment at any time
for Good Reason or (iii) the Executive's employment shall terminate due to
Disability, the Executive shall receive in addition to the Accrued Obligations,
the following:
7.2.1 For the remainder of the Period of Employment (determined
without regard to the termination thereof pursuant to Section 6) or for three
(3) years (which ever is longer), the Company shall continue to pay the
Executive the Base Salary in accordance with Section 4.1 of this Agreement as if
the Executive's employment had not been terminated.
7.2.2 Immediate full vesting in (i.e. full exercisability for)
any stock options previously granted to the Executive by the Company and not yet
vested as of the Date of Termination;
7.2.3 Continued exercisability, through the end of their
respective full original terms, for all vested options, whether previously
vested or vesting under this subsection 7.2;
7.2.4 Immediate full vesting in all other otherwise unvested
shares of restricted stock of the Company or other equity-based awards (if any)
previously awarded to the Executive, with immediate termination of all
restrictions on such awards;
7.2.5 Receipt of any other compensation and Benefits accrued or
earned and vested (if applicable) by the Executive as of the Date of Termination
(but not duplicative of the Accrued Obligations);
7.2.6 For the remainder of the Period of Employment (determined
without regard to the termination thereof pursuant to Section 6) or for three
(3) years (which ever is longer), the Company shall continue health,
prescription drug, dental, disability and life insurance benefits to the
Executive and/or the Executive's eligible family members at least equal to those
which would have been provided to them in accordance with Section 5.2 of this
Agreement if the Executive's employment had not been terminated; and
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7.2.7 All reasonable relocation costs of the Executive and his
family back to Ireland, which relocation costs shall be grossed-up for any
applicable taxes.
7.3 COBRA RIGHTS. It is understood that the Executive's rights under
this Section 7 are in lieu of all other rights which the Executive may otherwise
have had upon termination of employment under this Agreement; provided, however,
that no provision of this Agreement is intended to adversely affect the
Executive's rights under the Consolidate Omnibus Budget Reconciliation Act of
1985.
8. DISCLOSURE OF CONFIDENTIAL INFORMATION.Executive agrees that:
(A) During the term of this Agreement and for a period of five (5)
years after his Date of Termination, he will not disclose or make
available to any person or other entity any trade secrets,
Confidential Information, or "know-how" relating to the Company's,
its affiliates' and subsidiaries', businesses without written
authority from the Board, unless he is compelled to disclose it by
judicial process.
Confidential Information - shall mean all information
about the Company, its affiliates or subsidiaries, or relating to
any of their products, services or any phase of their operations,
not generally known to their Competitors or which is not public
information, which Executive knows or acquired knowledge of during
the term of his employment with the Company.
(B) Documents - under no circumstances shall Executive remove from
the Company' offices any of the Company's books, records, documents,
files, computer discs or information, reports, presentations,
customer lists, or any copies of such documents for use outside of
his employment with the Company, except as specifically authorized
in writing by the Board.
9. NON-COMPETE. Executive agrees that during the Period of Employment
and after his Date of Termination for as long as he is receiving the Base Salary
payments provided for in Section 7 of this Agreement that he will not, directly
or indirectly:
(A) Seek employment or consulting arrangements with or offer advice,
suggestions, or input to any Competitor of the Company; or
(B) Own any interest in, other than ownership of less than two
percent (2%) of any class of stock of a publicly held corporation,
manage, operate, control, be employed by, render advisory services
to, act as a consultant to, participate in, assess or be connected
with any Competitor of the Company, unless approved by the Board; or
(C) Solicit, induce, or attempt to induce any past or current
customer of the Company (a) to cease doing business in whole or in
part with or through the Company; or (b) to do business with any
other person, firm, partnership,
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corporation, or other entity which sales products or performs
services materially similar to or competitive with those provided by
the Company; or
(D) Initiate, encourage or solicit for employment any person who is
now employed or during the term of this Agreement becomes employed
by the Company (or whose activities or services are dedicated to the
Company).
Competitor - shall mean any individual, partnership,
joint venture, firm, corporation, limited liability company,
business trust, association, trust or other enterprise (whether or
not incorporated) engaged in the business of developing, producing,
manufacturing, selling and/or distributing a product or providing
services similar to any product produced or service provided by the
Company, its affiliates or subsidiaries.
10. REMEDY FOR VIOLATION OF SECTIONS 8 and 9. The Executive
acknowledges that he has been given adequate consideration and benefits to
support the enforcement of the provisions provided for in Sections 8 and 9 of
this Agreement and that the Company has no adequate remedy at law and will be
irreparably harmed if the Executive breaches or threatens to breach the
provisions of Sections 8 or 9 of this Agreement, and therefore, agrees that the
Company shall be entitled to injunctive relief to prevent any breach or
threatened breach of such Sections and that the Company shall be entitled to
specific performance of the terms of such Sections in addition to any other
legal or equitable remedy it may have. Nothing in this Agreement shall be
construed as prohibiting the Company from pursuing any other remedies at law or
in equity that it may have or any other rights that it may have under any other
agreement.
11. ARBITRATION. Any dispute or controversy between the Company and the
Executive, whether arising out of or relating to this Agreement, the breach of
this Agreement, or otherwise, shall be settled by arbitration administered by
the American Arbitration Association ("AAA") in accordance with its Commercial
Arbitration Rules then in effect, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. Any
arbitration shall be held before a single arbitrator who shall be selected by
the mutual agreement of the Company and the Executive, unless the parties are
unable to agree to an arbitrator, in which case, the arbitrator will be selected
under the procedures of the AAA. The arbitrator shall have the authority to
award any remedy or relief that a court of competent jurisdiction could order or
grant, including, without limitation, the issuance of an injunction. However,
either party may, without inconsistency with this arbitration provision, apply
to any court having jurisdiction over such dispute relief until the arbitration
award is rendered or the controversy is otherwise resolved. Except as necessary
in court proceedings to enforce this arbitration provision or an award rendered
hereunder, or to obtain interim relief, neither a party nor an arbitrator may
disclose the existence, content or results of any arbitration hereunder without
the prior written consent of the Company and the Executive. The Company and the
Executive acknowledge that this Agreement evidences a transaction involving
interstate commerce. Notwithstanding any choice of law provision included in
this Agreement, the United States Federal Arbitration Act shall govern the
interpretation and enforcement of this arbitration provision. The arbitration
proceeding shall be conducted in Greensboro, North Carolina or such
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other location to which the parties may agree. The Company shall pay the costs
of any arbitrator appointed hereunder.
12. SUCCESSORS.
a. This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's heirs and
legal representatives.
b. This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
c. As used in this Agreement, the term "Company" shall include any
successor to the Company's business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
13. MISCELLANEOUS.
a. This Agreement shall be governed by and construed in accordance
with the laws of the State of North Carolina, without reference to principles of
conflicts of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
b. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party, by overnight
courier, or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
Xxxxx X. Xxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
If to the Company:
Unifi, Inc.
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: General Counsel (currently Xxxxxxx X. XxXxx)
or to such other address as either of the parties shall have furnished to the
other in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
c. None of the provisions of this Agreement shall be deemed to
impose a penalty.
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d. The obligations contained in this Agreement (specifically
including Sections 8 and 9) shall survive the termination of this Agreement.
Additionally, the Executive acknowledges that the restrictions and covenants
contained in Section 9 are reasonable and necessary to protect the legitimate
business interests of the Company and will not impose an economic hardship on
the Executive. If any provision of this Agreement is held to be in any respect
illegal, invalid or unenforceable under present or future law, such provisions
shall be fully severable and this Agreement shall be construed and enforced as
if such illegal, invalid or unenforceable provisions had never comprised a part
hereof, and the remaining provisions hereof shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom. Furthermore, in lieu of such illegal,
invalid or unenforceable provision, the same shall be reformed and modified
automatically by the Compensation Committee as a part hereof to be as similar in
terms to such illegal, invalid or unenforceable provision as may be possible and
be legal, valid and enforceable.
e. Any party's failure to insist upon strict compliance with any
provision hereof shall not be deemed to be a waiver of such provision or any
other provision hereof.
f. This Agreement supersedes any prior employment agreement or
understandings, written or oral between the Company and the Executive and
contains the entire understanding of the Company and the Executive with respect
to the subject matter hereof.
g. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates written below.
UNIFI, INC.
By: XXXXXXX X. XXXXX
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Xxxxxxx X. XxXxx
Vice President, Secretary & General Counsel
By: XXXXXX X. XXX
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Xxxxxx X. Xxx,
Chairman of the Compensation Committee
of the Board of Directors
XXXXX X. XXXXX
XXXXX X. XXXXX (Seal)
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