EXHIBIT 10.16
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AGREEMENT, made and entered into as of the 14th day of November, 2001,
between BURLINGTON INDUSTRIES, INC., a Delaware corporation (hereinafter
sometimes referred to as the "Corporation"), and Xxxxxxx X. XxXxxxxx
(hereinafter referred to as "Executive").
WHEREAS, the Corporation and Executive have entered into an Employment
Agreement effective June 1, 2000, (the "2000 Agreement") and desire to enter
into a new Employment Agreement (the "2001 Agreement") effective November 14,
2001, (the "Effective Date");
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
contained, the Corporation and Executive hereby agree as follows:
l. The Corporation agrees to employ Executive, and Executive agrees to
serve the Corporation, upon the terms hereinafter set forth. Subject to the
terms of this Agreement, the Corporation agrees to employ Executive, and
Executive agrees to serve, as President and Chief Restructuring Officer.
Executive shall remain a member of the Corporation's Board of Directors until
the termination of his employment. Executive shall report to the Corporation's
CEO.
2. The 2000 Agreement is hereby canceled, deemed to be null and void
and is superceded by the 2001 Agreement. The employment of Executive hereunder
shall commence on November 14, 2001 and continue through November 13, 2002,
unless earlier terminated under the provisions of Paragraphs 5 or 6 of this
Agreement.
3. Executive agrees to serve the Corporation faithfully and to the best
of his ability under the direction of the Board of Directors of the Corporation,
devoting his entire time, energy and skill during regular business hours
performing the duties assigned by the Board.
4. The Corporation agrees to pay to Executive during the period of the
term hereof salary for his services at the rate (the "Annual Rate", which Annual
Rate shall refer to any subsequent increase in the rate of compensation of
Executive granted by the Corporation during the term of this Agreement) of Five
Hundred Twenty-Five Thousand Dollars ($525,000) per annum, payable in equal
semi-monthly or other more frequent installments in accordance with the general
practice of the Corporation for salaried senior employees.
5. If, during the term of this Agreement, Executive shall become
physically or mentally incapable of fully performing services required of him in
accordance with his obligations under Paragraph 3 of this Agreement, and such
incapacity is, or may reasonably be expected to exist, for more than two months
in the aggregate during any period of twelve consecutive months, as shall be
determined by a physician mutually agreed upon by the Corporation and Executive
(or Executive's legal representative if Executive is incapable of making such
determination), which determination shall be final and conclusive, the
Corporation may, upon notice to Executive, terminate this Agreement and his
employment hereunder, and upon such termination, Executive shall be entitled to
receive (i) cash compensation at the Annual Rate for a period of six months and
(ii) shall receive benefits comparable to those received by Executive on the
date hereof for such six-month period. Executive agrees to accept such payment
in full discharge and release of the Corporation, its subsidiaries and their
management, of and from any and all further obligations and
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liabilities to him hereunder (including any liability for payments under the
Corporation-funded disability insurance program, but excluding any amounts
payable pursuant to the Corporation's contributory Long-Term Disability Plan).
6. (a) The Corporation may in its sole discretion at any time
terminate Executive's employment under this Agreement, whether for Cause or
without Cause.
(b) Other than under the circumstances described in paragraph 7
below, in the event of (1) an involuntary termination of employment of Executive
without Cause or (2) a voluntary termination of employment by Executive for Good
Reason, Executive shall receive (in lieu of any payment under the Corporation's
Severance Policy), as soon as practicable following such termination:
(i) salary accrued through the date of termination at the
Annual Rate; and
(ii) the compensation provided for and to be paid in
accordance with the provisions of Paragraph 10(iii)
below.
Except as expressly provided in Paragraph 5 above and this subparagraph 6(b), in
all other respects, Executive's rights under all of the benefit plans of the
Corporation shall be governed by the terms of such plans and not by the
provisions of this Agreement.
(c) In the event of an involuntary termination for Cause, Executive
shall only be entitled to payments under the Severance Policy and only if the
conduct giving rise to such termination was not, in the Corporation's sole
judgment, willful.
(d) In the event that Executive's employment is terminated by the
Corporation or the Executive for any reason other than the reasons set forth in
Paragraph 5 above, upon its expiration on November 13, 2002, or for the reasons
set forth in subparagraphs 6(b) or 6(c), the Corporation shall have no further
obligation to Executive hereunder or under the Severance Policy.
(e) Notwithstanding any other provisions of this Agreement,
Executive's obligations under Paragraphs 8 and 9 of this Agreement shall survive
the termination or expiration of this Agreement.
7. In the event that the payment by the Corporation of the payments
required in the preceding Paragraph would result in the Executive becoming
subject to the imposition of an excise tax under Section 4999 of the Internal
Revenue Code of 1986, as amended, then the amount of payments made hereunder
shall be reduced to the extent such reduction would increase the after-tax value
of the payments of such amounts to the Executive. The determination of such
reduction amount, if any, shall be made by the Executive, with the advice of
Executive's tax or financial advisor.
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8. Executive expressly agrees, as further consideration hereof and as
a condition to the performance by the Corporation and its subsidiary companies
of their obligations hereunder, that while employed by the Corporation or its
subsidiary companies and during a period of six months following termination of
his employment, Executive will not directly or indirectly render advisory
services to or become employed by or participate or engage in any business
materially competitive with any of the businesses of the Corporation and its
subsidiary companies (Executive hereby acknowledging that Executive will have
access in his executive capacity to material information about all of the
Corporation's businesses) without first obtaining the written consent of the
Corporation.
9. Executive agrees that, both during and after his employment
hereunder, he will not disclose to any person unless authorized to do so by the
Corporation, any of the Corporation's trade secrets or other information which
is confidential or secret. Trade secrets or confidential information shall mean
information which has not been made available by the Corporation to the public,
including but not limited to strategic and business plans, product or market
development studies, plans or surveys; designs and patterns; inventions, secret
processes and developments; any cost data, including labor costs, material
costs, and any data that is a factor in costs; price, source or utilization data
on raw materials, fibers, machinery, equipment and other manufacturing supplies;
technical improvements, designs, procedures and methods developed by the
Corporation; any data pertaining to sales volume by location or by product
category; customer lists; production methods other than those licensed by
outside companies; compensation practices; and profitability, margins, asset
values, or other information relating to financial statements.
Executive acknowledges that the disclosure of the Corporation's trade
secrets or confidential information to unauthorized persons would constitute a
clear threat to the business of the Corporation, and that the failure of the
Executive to abide by the terms of Paragraphs 8 and 9 will entitle the
Corporation to exercise any or all remedies available to it in law or equity,
including without limitation, an injunction prohibiting a breach of these
provisions or suit for restitution.
10. In addition to the compensation payable to the Executive pursuant
the above provisions of this Agreement, the Corporation agrees to provide to
Executive (i) during the term of this Agreement an annual car allowance not to
exceed Thirteen Thousand Dollars ($13,000); (ii) coverage under a Split Dollar
Life Insurance Agreement under the Corporation's Split Dollar Life Insurance
Plan; and (iii) a payment in the amount of One Million Dollars ($1,000,000)
payable on November 13, 2002, provided that the Executive has not been
terminated for Cause.
11. The following capitalized terms used in this Agreement shall have
the meanings set forth below:
(i) "Severance Policy" means the policy providing for severance
payments to salaried employees set forth in the Corporation's Policy Manual as
in effect on the date of Executive's termination of employment.
(ii) A termination for "Cause" means a termination of employment
with the Corporation or any of the subsidiaries or joint ventures which, as
determined by the Corporation,
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is by reason of (A) the commission by the Executive of a felony or a
perpetration by the Executive of a dishonest act, material misrepresentation
or common law fraud against the Corporation or any subsidiary, joint venture
or other affiliate thereof, (B) any other act or omission which is injurious
to the financial condition or business reputation of the Corporation or any
subsidiary, joint venture or other affiliate thereof, or (C) the willful
failure or refusal of the Executive to substantially perform the material
duties of the Executive's position with the Corporation or any of the
Corporation's subsidiaries, joint ventures or affiliates.
(iii) "Good Reason" means (A) a failure to promptly pay
compensation due and payable to the Executive in connection with his or her
employment, (B) a reduction in Executive's level of compensation (other than
changes to incentive or benefit plans affecting all executives) of the
Corporation in a similar manner), (C) unless agreed to by Executive, the
assignment to the Executive of duties inconsistent with the Executive's
position as such duties were immediately prior to such assignment which
results in a diminution of such position, authority, duties or
responsibilities, (D) a change in the employment requirements of Executive
which, in the view of the Compensation and Benefits Committee of the
Corporation's Board of Directors, subjects Executive to an unfair change of
circumstances, or (E) the occurrence of a Change of Control.
(iv) "Change of Control" means that any of the following
events shall have occurred:
(A) The Corporation is merged or consolidated or
reorganized into or with another corporation, person or entity, and as a
result of such merger, consolidation or reorganization less than a majority
of the combined voting power of the then-outstanding securities of such
corporation, person or entity immediately after such transaction are held in
the aggregate by the holders of securities entitled to vote generally in the
election of Directors of the Corporation ("Voting Stock") immediately prior
to such transaction;
(B) The Corporation sells or otherwise transfers assets,
cumulatively representing more than 50% of the consolidated EBITDAR (earnings
before interest, taxes, depreciation, amortization and restructuring charges)
of the Corporation, in each case determined on November 15, 2001 for the
twelve month period ending on such date, to any other corporation, person or
entity not affiliated with the Corporation;
(C) If during any period of two consecutive years,
individuals who at the beginning of any such period constitute the Directors
of the Corporation cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by the
Corporation's stockholders, of each Director of the Corporation first elected
during such period was approved by a vote of at least two-thirds of the
Directors of the Corporation then still in office who were Directors of the
Corporation at the beginning of any such period.
(D) In no event shall the term "Change of Control" be
construed to include any change of control of the Corporation that occurs
solely as a result of any exchange of equity
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for debt securities of the Corporation upon consummation of a plan or plans
of reorganization in connection with any insolvency proceedings.
12. Any notice to be given by Executive hereunder shall be
sent to the Corporation at its offices, 0000 Xxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxx Xxxxxxxx 000x0, and any notice from the Corporation to
Executive shall be sent to Executive at the address set forth under his
signature below. Either party may change the address to which notices are to
be sent by notifying the other in writing of such changes in accordance with
the terms hereof.
IN WITNESS WHEREOF, Burlington Industries, Inc. has caused this
Agreement to be executed in its corporate name by its duly authorized
corporate representative thereunto duly authorized, and Executive has
hereunto set his hand and seal, as of the day and year first above written.
BURLINGTON INDUSTRIES, INC.
By__________________________________
Xxxxxx X. Xxxxxxxxx III
Chairman and Chief Executive
Officer
______________________________(L.S.)
Xxxxxxx X. XxXxxxxx
