EXHIBIT 99.1
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SEPARATION AND SETTLEMENT AGREEMENT
This Separation and Settlement Agreement ("Agreement") is made,
entered into and effective as of August 14, 2003 (the "Resignation Date"), by
and among WESTPOINT XXXXXXX INC. (the "Company"), a Delaware corporation with
its principal place of business in Xxxx Xxxxx, Xxxxxxx; XXXXXXXX X. XXXXX, XX.
("Executive"), an individual resident of the State of Georgia; HTG CORP., a
Georgia corporation with its principal place of business in Atlanta, Georgia
("HTG"); and VYTECH HOLDINGS, INC., a Delaware corporation with its principal
place of business in Anderson South, Carolina ("Vytech").
WITNESSETH:
WHEREAS, the Company and Executive are parties to an Employment
Agreement, dated July 1, 2000 (the "Employment Agreement), pursuant to which
Executive serves as Chairman of the Board of Directors and the Chief Executive
Officer of the Company;
WHEREAS, the Employment Agreement has an effective term ending on the
third anniversary of the date on which either party thereto provides written
notice to the other party causing the Term of Employment (as defined therein) to
cease extending automatically;
WHEREAS, as of the Resignation Date, neither party has given such
written notice, thus causing the Employment Agreement to have a minimum term
from the Resignation Date of three years;
WHEREAS, the Company and Executive nevertheless wish to provide in
this Agreement for the resignation, as of the Resignation Date, by the Executive
as the Chairman, and as a member, of the Board of Directors of the Company and
as an employee of the Company, and from any and all offices of the Company, and
every other position, office or directorship of every other entity for which
Executive was serving at the request of the Company;
WHEREAS, the Company is (a) a party to that certain letter agreement
(the "HTG Agreement"), dated November 29, 2001, between the Company and HTG, an
affiliate of the Executive, and (b) the beneficiary of that certain Guaranty
Agreement (the "Guaranty"), dated November 29, 2001, and made by Vytech, an
affiliate of the Executive;
WHEREAS, in connection with the termination of the Employment
Agreement, the Company and each of HTG and Vytetch wish to resolve, settle
and/or compromise certain matters, claims and issues between them with respect
to the HTG Agreement and the Guaranty, respectively;
WHEREAS, the Company and Executive desire (a) to set forth the
payments and benefits that Executive will be entitled to receive from the
Company in connection with (i) his resignation from employment with the Company
and (ii) his performance of certain services subsequent to the Resignation Date
and (b) to resolve, settle and/or compromise certain matters, claims and issues
between them, including without limitation, Executive's resignation from the
offices he held and from his employment with the Company; and
WHEREAS, prior to the Resignation Date, the Company filed a Motion,
styled Motion of Debtors for Order Pursuant to 11 U.S.C. ss. 363(b) and
Bankruptcy Rule 9019(a) Authorizing Debtors' Entry Into Separation and
Settlement Agreement with Xxxxxxxx X. Xxxxx Xx., to obtain the requisite
approval of this Agreement by the United States Bankruptcy Court for the
Southern District of New York (the "Court"), within the context of the Company's
filing (Case No. 03-13532) for reorganization under chapter 11 of title 11 of
the United States Code (the "Bankruptcy Code"), authorizing the Company to
assume and enter into and perform this Agreement, and an order has been entered
by the Court granting such Motion;
NOW, THEREFORE, in consideration of the promises and agreements
contained herein and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, and intending to be legally bound, the
Company and Executive hereby agree as follows:
1. RESIGNATION. Executive hereby resigns, effective on the
Resignation Date, his employment with the Company and its subsidiaries and
related or affiliated companies, and his positions as Chairman, and member, of
the Board of Directors of the Company and Chief Executive Officer of the
Company. Executive further resigns, effective on the Resignation Date, from all
other offices, positions or Committee memberships of the Company or its
subsidiaries or related or affiliated companies which he may hold. The Company
hereby consents to and accepts said resignations. It is understood and agreed
that the Executive's resignation is by mutual agreement between Executive and
the Company pursuant to the terms and conditions of this Agreement.
2. TERMINATION OF EMPLOYMENT AGREEMENT. The Company and Executive
covenant and agree that the Employment Agreement is hereby terminated and shall
be of no further force or effect whatsoever, except for the provisions of
Section 9 of the Employment Agreement, "Restrictions on Conduct of the
Executive," which shall survive such termination. In compromise and settlement
of all of their respective obligations to one another under the Employment
Agreement (including, without limitation, the obligation of the Company to make
the severance payments, and provide the benefits, to Executive which are
described in Paragraph 6 of the Employment Agreement), the Company and Executive
hereby agree as follows:
(a) On the Resignation Date, the Company will pay the Executive one
million dollars ($1,000,000).
3. RESIGNATION SERVICES.
(a) From the Resignation Date through December 31, 2005, Executive
agrees to make himself available, from time to time, during business hours, and
upon reasonable notice, to perform consulting and other services for the
Company, which services will be of a nature reasonably comparable with services
performed by the Executive for the Company during his employment and agrees to
make himself available to the Company for a minimum of 40 hours per calendar
month.
(b) The Company will reimburse Executive for any reasonable business
expenses incurred incurred by Executive prior to the Resignation Data that are
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reimbursable pursuant to the Company's expense reimbursement policies. Executive
shall be reimbursed by the Company for reasonable travel, lodging, telephone and
similar expenses incurred in connection with the services provided in Section
3(a).
4. COMPENSATION AND BENEFITS. As full compensation for the services
to be provided by Executive to the Company pursuant to Section 3 of this
Agreement, the Company shall pay Executive the following:
(a) During and in respect of the period beginning on the Resignation
Date and ending on December 31, 2003, the Company will pay the Executive a total
of three hundred eighteen thousand seven hundred fifty dollars ($318,750.00),
with such amount payable in equal semi-monthly installments. During and in
respect of the calendar years 2004 and 2005, the Company will pay the Executive
four hundred seventy-five thousand dollars ($475,000.00) per annum, with such
amounts payable in equal semi-monthly installments.
(b) Executive shall be paid in accordance with the Company's normal
payroll cycle any base salary amount earned but unpaid as of the Resignation
Date.
(c) The Company shall be entitled to withhold from any amounts
payable under this Agreement such amounts of payroll taxes and other similar
deductions as are required by applicable law, rule or regulation of applicable
governmental authorities, and shall withhold for payment to the appropriate tax
authorities such additional amounts as otherwise directed by the Executive to be
withheld and paid.
(d) If the Executive becomes disabled such that he is prevented from
complying with Section 2 of this Agreement, or is deceased at the time of any of
the payments required pursuant to this Section 3, the obligations to make the
payments to the Executive under this Agreement shall be immediately terminated
as of the date of such disabling or death and no payments will be made.
(e) Effective as of the Resignation Date, Executive shall cease
participation in all employee benefit plans, funds, arrangements and policies of
the Company, unless otherwise provided by law (e.g., continuation coverage under
the medical plan in accordance with the Consolidated Omnibus Reconciliation Act
of 1985, as amended ("COBRA")) or the terms of such plan, fund, arrangement or
policy. Executive shall return possession and cease the use of all Company
offices, airplanes and any other furniture and furnishings, including the
contents of Executive's office, other than personal items and office furniture
that the Company and Executive may choose to sell at a mutually agreeable price.
5. CANCELLATION OF EMPLOYMENT AGREEMENT. The parties covenant and
agree that the Employment Agreement, together with any other prior or subsequent
agreements, whether oral or written, relating to the employment of the Executive
with the Company, are hereby cancelled and shall be of no further force or
effect whatsoever, and no sums shall be due Executive thereunder in connection
with the resignations provided for herein or otherwise, except for the
provisions of Section 9 of the Employment Agreement, "Restrictions on Conduct of
the Executive," which shall survive such cancellation.
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6. TERMINATION OF LETTER AGREEMENT AND GUARANTY. In furtherance of
the settlement and compromise provided for herein, and as an inducement thereto
and in consideration therefor, the Company and HTG hereby agree to the
termination, as of the Resignation Date, of the HTG Agreement and of each of
their respective obligations, of any nature whatsoever, thereunder and the
Company and Vytetch hereby agree to the termination, as of the Resignation Date,
of the Guaranty and each of the obligations, of any nature whatsoever, of
Vytetch thereunder and that each of the HTG Agreement and the Guaranty shall be
of no further force or effect whatsoever, and no sums shall remain due
thereunder, and no obligations of any nature whatsoever thereunder shall survive
this Agreement.
7. INDEMNIFICATION BY COMPANY.
(a) With respect to any actions, suits, claims, demands or other
proceedings, based upon an alleged cause of action arising out of any
action or inaction which Executive may have taken or failed to take
on behalf of the Company or of its affiliated, related or subsidiary
entities at any time on or prior to the Resignation Date in his
capacity as an officer, director or employee of the Company or its
affiliated, related or subsidiary entities and, in the event
Executive shall, at any time subsequent to the date hereof, be
subjected to any such action, suit, claim, demand or any other
proceeding, Executive shall be:
(i) entitled to receive the benefit, in respect of any
actions, suits, claims, demands or other proceedings, or of any
actions, suits, claims, demands or other proceedings asserted against
the Company, of any insurance coverage and protection under any
director and/or officer liability insurance policy which is currently
maintained by the Company or its affiliated, related or subsidiary
entities and which is now available to any present or former
executive officers or directors of the Company or its affiliated,
related or subsidiary entities, or any insurance coverage and
protection under any such policy which is hereafter maintained by the
Company or its affiliated, related or subsidiary entities which is
available to any then former executive officer or former director of
the Company or its affiliated, related or subsidiary entities.
provided, however that the Company shall not indemnify, nor provide
insurance coverage to, the Executive if it is determined by a court of competent
jurisdiction that the Executive is guilty of, or the Executive pleads nolo
contendere to, criminal charges or the Executive is found by a court of
competent jurisdiction to have committed fraud against the Company.
(b) With respect to the foregoing rights of indemnification, the
Company shall, and shall cause any affiliated, related or subsidiary entity to,
cooperate fully with Executive in responding to or defending against any such
action, suit, claim, demand or proceeding. Executive shall comply with the
provisions of its certificate of incorporation or bylaws relating to advance of
expenses.
(c) Within 5 business days after receipt by Executive of notice of
the commencement of any action, suit, claim, demand or proceeding described in
the preceding paragraph, Executive shall, if a claim for indemnification in
respect thereof is to be made by Executive against the Company hereunder, notify
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the Company in writing of the commencement thereof. In case any such action is
brought against Executive, and he notifies the Company of the commencement
thereof, the Company will be entitled, at its expense, to appoint counsel
satisfactory to Executive to represent and defend Executive in such action;
provided, however, that if the defendants in any such action include both
Executive and the Company and if Executive and the Company, or counsel for the
Company and Executive, shall have reasonably concluded that Executive may have
interests adverse to the Company, Executive shall have the right to select
separate counsel to defend such action on behalf of Executive and be reimbursed
only to the extent provided for under the Company's existing insurance.
8. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As an inducement to
the Executive to enter into this Agreement and consummate the transactions
contemplated hereby, the Company represents and warrants to the Executive as
follows:
(a) The Company is duly organized, validly existing, and in good
standing under the laws of the State of Delaware;
(b) The Company has full power and authority (including full
corporate power and authority) to execute and deliver this Agreement and perform
its obligations hereunder, all of which has been duly authorized by the Board of
Directors of the Company. This Agreement constitutes the valid and binding
obligation of the Company, enforceable in accordance with its terms and
conditions. The Company is not required to give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government,
governmental agency or court, which has not been obtained, and has obtained all
necessary authorizations from the Court (the Motion having been fully and
finally approved) in order to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement.
(c) The execution and delivery of this Agreement by the Company and
the consummation of the transactions contemplated hereby by the Company will not
result in a breach of, constitute default under, or require any notice under any
agreement, contract, license or other arrangements to which the Company is a
party by which it is bound, or any provisions of its certificate of
incorporation or bylaws.
9. REPRESENTATIONS AND WARRANTIES OF EXECUTIVE. As an inducement to
the Company to enter into this Agreement and consummate the transactions
contemplated thereby, the Executive represents and warrants to the Company that
he has full power and capacity to execute and deliver this Agreement and to
perform his obligations hereunder. This Agreement constitutes a valid and legal
binding obligation of Executive, enforceable according to its terms.
10. NON-DISCLOSURE; STATEMENTS TO THIRD PARTIES.
(a) Except as may be required by law, inclusive without limitation,
the Bankruptcy Code and federal securities laws and regulations, all provisions
of this Agreement and the circumstances giving rise hereto are and shall remain
confidential and shall not be disclosed to any person not a party hereto other
than (i) Executive's spouse and (ii) each party's attorney, financial advisor
and/or tax advisor to the extent necessary for such advisor to render
appropriate legal, financial and tax advice, and except as necessary to carry
out the provisions of this Agreement.
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(b) Because the purpose of this Agreement is to settle amicably any
and all potential disputes or claims among the parties, neither Executive nor
the Company shall, directly or indirectly, make or cause to be made any
statements to any third parties criticizing or disparaging the other or
commenting on the character or business reputation of the other. Executive
further hereby agrees not to
comment to others concerning the status, plans or prospects of the
business of the Company.
11. NOTICES. For all purposes of this Agreement, all communications
provided for herein shall be in writing and shall be deemed to have been duly
given when delivered, addressed to the Company (to the attention of the Chief
Executive Officer) at its principal executive offices and to Executive at his
principal residence or to such other address as any party may have furnished to
the other in writing and in accordance herewith. Notices of change of address
shall be effective only upon receipt.
12. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to
in writing signed by Executive and the Company. No waiver by either party hereto
at any time of any breach by the other party hereto or compliance with any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied with respect to the subject matter
hereof have been made by any of the parties that are not set forth expressly in
this Agreement and every one of them (if, in fact, there have been any) is
hereby terminated without liability or any other legal effect whatsoever.
13. ENTIRE AGREEMENT. This Agreement shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
shall supersede all prior agreements, covenants, communications, understandings,
commitments, representations or warranties, whether oral or written, by any
party hereto or any of its representatives pertaining to such subject matter.
14. EXPENSES. The Company and Executive shall each bear their own
costs incurred in connection with the negotiation, execution and delivery of
this Agreement and the transactions contemplated by this Agreement, provided
that on the Resignation Date the Company shall reimburse the Executive for tax
and legal advisors to the Executive in an amount up to fifty thousand dollars
($50,000.00), as requested by the Executive upon receipt of appropriate
supporting documentation of such expenses.
15. GOVERNING LAW. Any dispute, controversy, or claim of whatever
nature arising out of or relating to this Agreement or breach thereof shall be
governed by and under the laws of the State of Georgia. The parties agree that
any and all disputes, controversies, or claims of whatever nature arising out of
or relating to this agreement or breach thereof shall be resolved by a court of
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general jurisdiction in the State of Georgia, and the parties hereby consent to
the exclusive jurisdiction of such court in any action or proceeding arising
under or brought to challenge, enforce, or interpret any of the terms of this
Agreement.
16. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall nevertheless remain in full force and
effect.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same Agreement.
18. CAPTIONS AND SECTION HEADINGS. Captions and Section headings used
herein are for convenience and are not part of this Agreement and shall not be
used in construing it.
19. FURTHER ASSURANCES. Each party hereto shall execute such
additional documents, and do such additional things, as may reasonably be
requested by the other party to effectuate the purposes and provisions of this
Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first set forth above.
WESTPOINT XXXXXXX INC.
By: /s/ X.X. Xxxxxxxx
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X. X. Xxxxxxxx
President
/s/ Xxxxxxxx X. Xxxxx, Xx.
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XXXXXXXX X. XXXXX, XX.
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