EXHIBIT 10.3
SEVERANCE AGREEMENT
SEVERANCE AGREEMENT, dated as of February 10, 1999, by and among
WORLDTEX, INC., a Delaware corporation ("WTX"), and XXXXXXX X. XXXXXX (the
"Executive").
W I T N E S S E T H :
-------------------
WHEREAS, the Executive has been employed as an executive of WTX
pursuant to an Employment Contract dated as of November 15, 1993, as amended
(the "Employment Contract"); and
WHEREAS, the parties wish to terminate the Employment Contract and
end the employment relationship thereunder on mutually agreeable terms;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and for other good and valuable consideration, the
parties hereto agree as follows:
1. TERMINATION OF EMPLOYMENT CONTRACT.
-----------------------------------
The Employment Contract and all rights and obligations arising
thereunder are terminated effective as of the date of this Agreement.
2. RESIGNATIONS AND TERMINATION OF EMPLOYMENT.
-------------------------------------------
The Executive hereby resigns as a director, officer and
employee of WTX, as an officer and director of all of WTX's Subsidiaries or
Affiliates and from all corporate committees of WTX or of any such Subsidiaries
or Affiliates, effective as of the date of this Agreement. For purposes of this
Agreement, a "Subsidiary" of a corporation shall mean any corporation,
association or other business entity which is required to be consolidated with
such corporation under generally accepted accounting principles, and an
"Affiliate" of a corporation shall mean a person or other entity that directly
or indirectly controls, or is controlled by, or is under common control with
such corporation.
3. PAYMENTS TO THE EXECUTIVE.
--------------------------
WTX shall pay the Executive the following amounts:
(a) $675,000, representing 300% of his current annual salary,
payable on the eighth day after the date of this Agreement;
(b) The bonus the Executive is entitled to receive for
services rendered during 1998 under Section 4(c) of the Employment Contract,
payable when and as provided in such Section (which bonus shall be calculated
without giving effect to any special charges relating to the closing of the
Rubyco fine denier operations in 1998); and
(c) The supplemental retirement benefit that the Executive is
entitled to receive pursuant to Section 19 of the Employment Contract, in the
amount of $18,567 per month, payable on the first business day of each month for
120 consecutive months, commencing with the month next following the date of
this Agreement. If Executive shall die prior to the payment of all amounts
payable under this clause (c), all such remaining payments shall be made to
Executive's estate or his designated beneficiary.
4. OPTIONS AND BENEFIT PLANS.
--------------------------
(a) The Executive will be entitled to exercise in accordance
with their terms his outstanding stock options to purchase 300,000 shares of WTX
common stock, it being understood that, solely for purposes of the provisions of
such options, Executive shall be deemed to be an employee of WTX and such
employment shall be deemed terminated upon termination of the Consulting
Agreement (as defined below).
(b) WTX acknowledges that the Executive's benefits under the
Worldtex Profit Sharing and Retirement Savings Plan (which includes the WTX
401(k) plan) (the "ESOP") are fully vested.
5. OTHER BENEFITS.
---------------
(a) WTX and the Executive agree that, effective as of the date
of this Agreement, the Executive shall be entitled to retain the possession, and
WTX shall transfer ownership, of the 1999 Mercedes Benz 500 automobile provided
to the Executive by WTX.
(b) WTX agrees to provide, at its expense, coverage to
Executive under the medical insurance plans or policies generally applicable to
employees of WTX, as such may be modified from time to time, so long as the
Consulting Agreement continues in effect. WTX will not provide the enhanced
benefits currently provided by WTX to the Executive under the Employment
Contract. Executive acknowledges and confirms that he is electing the medical
insurance coverage set forth in this Section 5(b) in lieu of all rights to COBRA
continuation coverage to which he would otherwise be entitled under WTX's
medical insurance plans or policies pursuant to Section 4980B of the Internal
Revenue Code or Sections 601-608 of ERISA.
6. CONSULTING AGREEMENT.
---------------------
Simultaneously with the execution of this Agreement, WTX and
the Executive shall execute a consulting agreement in the form attached to this
Agreement as Exhibit A (the "Consulting Agreement"), which shall become
effective on the date of this Agreement if the Executive shall not have revoked
this Agreement at or before expiration of the period specified in Section 10
hereof.
7. NONSOLICITATION, NONCOMPETITION AND
CONFIDENTIALITY AGREEMENTS.
-----------------------------------
(a) For a period of one year following the execution of this
Agreement, the Executive shall not, directly or indirectly, solicit any person
who is employed by WTX or any of its Subsidiaries or Affiliates to (A) terminate
his or her employment with WTX or such other company, or (B) accept employment
with anyone other than WTX or such other company.
(b) The Executive agrees that he will not, directly or
indirectly (individually or for, with or through any other person, firm or
corporation), compete with WTX or any of its Subsidiaries or Affiliates for a
period of three years following his termination of employment with WTX with
respect to any business carried on by WTX or any of its Subsidiaries or
Affiliates as of the date of this Agreement. Notwithstanding the foregoing, the
Executive shall be permitted to own not in excess of one percent of any class of
securities of any publicly traded company, provided the Executive is not part of
any controlling group and is solely a passive investor.
(c) All confidential information which the Executive may now
have or may have obtained during his employment by WTX relating to the business
of WTX or any Subsidiary or Affiliate thereof shall not be disclosed to any
other person (except as required by law) without the prior written permission of
WTX, and Executive shall return all tangible evidence of such confidential
information to WTX on the date of this Agreement or promptly thereafter
following discovery thereof. Such information shall not include any information
otherwise publicly known.
(d) The Executive shall also, no later than the date of this
Agreement, or promptly thereafter following the Executive's discovery thereof,
return to WTX any credit cards, cardkey passes, computer access codes, door and
file keys, and other property provided by WTX, if any.
(e) All of Executive's interest in patents, patent
applications, inventions, technological innovations, copyrights, developments
and processes during his employment by WTX owned or developed by Executive
relating to the business of WTX or any affiliate of WTX, shall belong to WTX,
and without further compensation, but at WTX's expense, forthwith upon request
of WTX, Executive shall execute any and all such assignments and other documents
and take any and all such other action as WTX may reasonably request in order to
vest in WTX all Executive's right, title and interest in and to such patents,
patent applications, inventions, technological innovations, copyrights,
developments or processes, free and clear of liens, charges and encumbrances.
(f) In the event of a breach or threatened breach of the
provisions of this Section 7, the Executive acknowledges that WTX will be
entitled to seek from a court any interim or provisional relief that may be
necessary to protect WTX's rights or property pending the arbitral tribunal's
determination of the merits of the controversy.
(g) If it is determined that any of the provisions of this
Section 7, or any part thereof, is unenforceable because of the duration or
scope of such provision, it is the intention of the parties that the duration or
scope of such provision, as the case may be, shall be reduced so that such
provision becomes enforceable.
8. RELEASES.
---------
(a) The Executive, having received independent legal advice,
voluntarily and knowingly releases WTX, each of its Subsidiaries and Affiliates
and their respective officers and directors from any and all claims, actions,
and causes of action he has or may have arising on or before the date of this
Agreement, whether known or unknown, relating to his employment by, or
termination of employment with, WTX or any of its Subsidiaries and Affiliates,
including, without limitation, (a) those arising under the Age Discrimination in
Employment Act of 1967, as amended, and other federal, state or local human and
civil rights, employment discrimination or labor laws, and (b) those arising
under the Employment Contract, except that the Executive does not release (i)
his right to have WTX perform its obligations under this Agreement or the
Consulting Agreement, (ii) his right to benefits under the ESOP, (iii) any
claim, action or cause of action against an officer or director of WTX or any of
its Subsidiaries or Affiliates for an intentional tort as to which the primary
factual basis is not known by the Executive as of the date of this Agreement or
(iv) his right to indemnification under (1) the certificate of incorporation or
bylaws of WTX or any of its Subsidiaries or Affiliates of which he has been an
officer or director, (2) the laws of the state of incorporation of WTX or any
such Subsidiary or Affiliate, or (3) any insurance policy maintained by WTX or
any such Subsidiary of Affiliate, as the case may be. The Executive acknowledges
that he was given a period of at least 21 days to consider whether to execute
this Agreement and during such period he consulted with counsel of his choosing.
The Executive further acknowledges that he has carefully read the release set
forth in this paragraph, fully understands it, is signing this Agreement
voluntarily, and is receiving consideration for the release.
(b) WTX, each of its Affiliates and Subsidiaries, voluntarily
and knowingly releases the Executive from any and all claims, actions and causes
of action it has or may have arising on or before the date of this Agreement,
whether known or unknown, except that WTX does not release its right to have the
Executive perform his obligations under this Agreement or the Consulting
Agreement or any claim, action or cause of action that WTX, any of its
Affiliates or Subsidiaries may have against the Executive to the extent it is
determined by a final judgment adverse to the Executive that the Executive's
acts or omissions were in bad faith or involved intentional misconduct or a
knowing violation of law, or the Executive personally gained in fact a financial
profit or other advantage to which he was not legally entitled.
9. COOPERATION IN LITIGATION.
--------------------------
The Executive shall cooperate and generally make himself
available to give testimony and assistance in connection with any litigation or
arbitration proceeding or any proceeding or investigation initiated by any
governmental authority or agency involving WTX or any of its Subsidiaries or
Affiliates and arising out of activities of WTX or its Subsidiaries or
Affiliates prior to the date of this Agreement and during the period of his
employment with WTX. WTX or one of its Subsidiaries or Affiliates shall
reimburse the Executive for, or advance to the Executive, all reasonable
out-of-pocket travel and other expenses incurred by the Executive at the
specific request of WTX in connection with the Executive's testimony,
cooperation and assistance under this Section 9. Such expenses shall be
reimbursed or advanced promptly after the Executive's submission to WTX of
statements in such reasonable detail as WTX may require. Time spent performing
Executive's obligations under this Section 9 shall be deemed to be time spent
consulting pursuant to the Consulting Agreement and, accordingly, the
Executive's compensation for performing his obligations under this Section 9
shall be governed by the Consulting Agreement.
10. OPPORTUNITY FOR REVIEW BY COUNSEL
AND PERIOD TO REVOKE AGREEMENT.
-------------------------------------
The Executive acknowledges that he has been advised to consult
with an attorney before executing this Agreement. The Executive shall have seven
days after executing this Agreement (until February 17, 1999) to revoke it by
providing written notice to the President of Worldtex within the seven day
period, whereupon the rights and obligations of the parties to this Agreement
and the Consulting Agreement shall be revoked retroactively to the date of this
Agreement, and WTX and the Executive shall return to each other any amounts or
other benefits provided under this Agreement or the Consulting Agreement.
11. RIGHTS RELATING TO EMPLOYMENT AND TERMINATION.
----------------------------------------------
This Agreement and the Consulting Agreement integrates and
embodies all understandings and agreements among the Executive, WTX and/or any
of its Subsidiaries or Affiliates in connection with the Executive's employment
and termination of employment with WTX or any of its Subsidiaries or Affiliates.
Except as specifically provided in this Agreement and the Consulting Agreement,
the Executive shall not be entitled to any payments or other benefits on account
of his having been employed by, or having terminated his employment with, WTX or
any of its Subsidiaries or Affiliates.
12. WITHHOLDING.
------------
WTX shall withhold from all amounts payable to the Executive
under this Agreement all federal, state and local taxes required by law to be
withheld with respect to such payments. The withholding amounts for payments or
other benefits to be made or provided under this Agreement on the eighth day
after the date of this Agreement are set forth on Exhibit B.
13. NOTICE.
-------
Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or on the fifth day after being sent by registered or
certified mail, postage prepaid, return receipt requested, duly addressed to the
party concerned at the address indicated below or to such changed address as
such party may subsequently give notice of:
If to WTX: Worldtex, Inc.
Xxxxxxxx Xxxx, Xxxxx 000
000 Xxxx Xxxxxxxxx, X.X.
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: President
If to the Executive: Xxxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000
14. AMENDMENT OR WAIVER.
--------------------
No provision in this Agreement may be amended unless such
amendment is agreed to in writing, signed by the Executive and by an authorized
officer of WTX. No waiver by either party hereto of any breach by the other
party of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of a similar or dissimilar provision or
condition at the same or any prior or subsequent time. Any waiver must be in
writing and signed by the Executive or an authorized officer of WTX, as the case
may be.
15. SEVERABILITY.
-------------
In the event that any provision of this Agreement shall be
held to be invalid or unenforceable for any reason, in whole or in part, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
16. HEADINGS.
---------
The headings of sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
17. COUNTERPARTS.
-------------
This Agreement may be executed in one or more counterparts.
18. REFERENCES.
-----------
In the event of the Executive's death or a judicial
determination of his incompetence, references in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his legal representative or to
his beneficiary or beneficiaries.
19. BINDING AGREEMENT; ASSIGNMENT.
------------------------------
Except as provided in Section 10 hereof, this Agreement is
binding upon the parties hereto and their respective successors, heirs and
assigns. No rights or obligations under this Agreement may be assigned or
transferred by the Executive except that the Executive's rights to compensation
and benefits hereunder shall, in the event of death, pass to his estate, or to
his designated beneficiary, and may be transferred by will or operation of law.
In the event of a future disposition of (or including) the properties and
business of WTX, substantially as an entirety, by merger, consolidation, sale of
stock or assets or otherwise, then WTX shall require the acquiring or surviving
corporation (which shall be substituted for WTX hereunder) to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that WTX would have been required to perform it had no such disposition
occurred. The Executive's rights under this Agreement shall not be transferable
by assignment or otherwise, shall not be subject to commutation or encumbrance
and shall not be subject to the claims of the Executive's creditors.
20. PAYMENT OBLIGATION ABSOLUTE.
----------------------------
Except as provided in Section 10 hereof, WTX's obligation to
make payments provided for in this Agreement and otherwise perform its
obligations hereunder shall be absolute and unconditional and shall not be
affected by any setoff, counterclaim, recoupment, defense or other circumstance
or rights which WTX may have against the Executive or anyone else (including
without limitation any rights which WTX may have against the Executive for
violation of Section 7 of this Agreement), all of which shall be required to be
asserted in independent proceedings. The Executive shall not be required to
mitigate the amount of any payment provided for herein by seeking other
employment or taking any other action nor shall the amount of any payment
provided for herein be reduced by amounts earned by the Executive from other
employment or otherwise.
21. ARBITRATION; INDEMNIFICATION.
-----------------------------
(a) Any controversy or claim arising out of or in connection
with this Agreement shall be settled by arbitration held in New York City in
accordance with the rules of the American Arbitration Association then in
effect, and judgment upon the award rendered (including an award for money
damages) may be entered in any court having jurisdiction. The costs of the
arbitration proceedings shall be borne by WTX. Either party may, without
inconsistency with this Agreement, seek from a court any interim or provisional
relief that may be necessary to protect the rights or property of that party
pending the arbitral tribunal's determination of the merits of the controversy.
(b) In addition to (and not in lieu of) any of the Executive's
rights to indemnification or otherwise, contained in WTX's certificate of
incorporation, by laws or any other agreement, if any action, suit, proceeding
(including any arbitration proceeding) or claim shall be brought or asserted
with respect to the enforcement or interpretation of this Agreement or any
provision contained herein, WTX, to the full extent permitted by applicable law
and its certificate of incorporation and by-laws as in effect on the date
hereof, hereby indemnifies the Executive for his reasonable attorneys' fees and
other expenses incurred in connection with such action, suit, proceeding or
claim and agrees to pay or reimburse the same promptly upon demand by the
Executive (plus interest at the applicable Federal rate provided in Section
7872(f)(2) of the Internal Revenue Code of 1986, as amended), provided that WTX
shall not be obligated to indemnify the Executive under this Agreement with
respect to any action, suit, proceeding or claim brought by the Executive in
which it is finally determined that the Executive's interpretations of this
Agreement at issue, taken as a whole, are less correct than the interpretations
asserted by WTX. WTX shall preserve and make available to the Executive all
documents and information now or hereafter in the possession of WTX which may be
required by the Executive for the prosecution or defense of any such action,
suit, proceeding or claim.
22. GOVERNING LAW.
--------------
This Agreement shall be governed by the laws of the State of New
York. IN WITNESS WHEREOF, the Executive and WTX have caused this Agreement to be
executed as of the day and year first above written.
WORLDTEX, INC.
By: _______________________
________________________________
Xxxxxxx X. Xxxxxx
EXHIBIT A
CONSULTING AGREEMENT
CONSULTING AGREEMENT, made as of February 10, 1999, between
WORLDTEX, INC., a Delaware corporation ("WTX"), and XXXXXXX X. XXXXXX (the
"Consultant").
W I T N E S S E T H :
--------------------
WHEREAS, the Consultant has previously been employed as an executive
of WTX and the parties now wish to enter into an arrangement whereby the
Consultant will act as a consultant to WTX.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and for other good and valuable consideration, the
parties hereto agree as follows:
1. TERM.
-----
The term of this Agreement shall commence on the date of this
Agreement and end on the day preceding the third anniversary of the date of this
Agreement, unless the Agreement is earlier terminated due to Cause (as defined
below).
2. SERVICES.
---------
During the term of this Agreement, WTX shall retain the
Consultant as a consultant to WTX. During that period the Consultant shall
consult with and advise the officers of WTX with respect to such matters
involving the business and affairs of WTX as the officers may from time to time
present to him, which consultation may be made by telephone upon Consultant's
request. Unless Disability (as defined below) has occurred, the Consultant shall
be obligated to devote the equivalent of 15 business days to his consulting
duties during any yearly period (treating the balance of 1999 after the date of
this Agreement as a yearly period for these purposes to the extent his physician
advises his health permits). Such consultation shall be rendered at such times
as the Consultant shall reasonably advise WTX's chief executive officer are
appropriate giving effect to his then regular personal and other business
activities. WTX's chief executive officer shall give the Consultant reasonable
advance notice of any requirements for consultation, and the Consultant shall
use his reasonable best efforts to perform such consultation on the schedule
requested. Where the Consultant is required to render any service on a
particular day, he shall receive credit for a full day's service. WTX may
terminate this Agreement without any further obligation hereunder in the event
Cause has occurred.
3. FEES AND EXPENSES.
------------------
(a) On the first business day of every month during the term
of this Agreement commencing with the month after the date of this Agreement,
WTX shall pay the Consultant a fee of $4,767 in full payment for his services
under this Agreement. In the event of the Consultant's death or Disability
during the term of this Agreement, any remaining fees payable during the term of
this Agreement shall become payable in monthly installments to the Consultant's
beneficiaries. If the Consultant is requested by WTX to perform and the
Consultant consents and does perform consulting services hereunder in excess of
15 days per year he shall be paid at a rate of $250 per hour.
(b) The Consultant shall be entitled to reimbursement for
expenses reasonably and necessarily incurred by him in connection with the
performance of his consultation duties, in accordance with WTX's then applicable
procedures, including without limitation reimbursement for travel and related
expenses to and from whatever may be his then current place of residence or
place where he may be conducting other business activities.
4. DEFINITIONS OF DISABILITY AND CAUSE.
------------------------------------
(a) "Cause" shall have occurred if the Consultant is convicted
of a felony relating to the conduct of the business of WTX or any affiliate of
WTX, the Consultant commits an act of personal dishonesty which is intended to
personally enrich the Consultant or members of his family at the financial
expense of WTX or any affiliate of WTX, or the Consultant fails to perform his
obligations under this Agreement in any material respect, other than due to
death or Disability, after being given five business days in which to cure his
failure to perform.
(b) "Disability" shall have occurred if the Consultant has
been physically or mentally incapacitated or disabled for a period of six
consecutive months to an extent which renders the Consultant unable to perform
his services as evidenced by the written confirmation of Consultant's physician
and, if WTX shall so require, an independent physician.
5. NOTICE.
-------
Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or on the fifth day after being sent by registered or
certified mail, postage prepaid, return receipt requested, duly addressed to the
party concerned at the address indicated below or to such changed address as
such party may subsequently give notice of:
If to WTX: Worldtex, Inc.
Xxxxxxxx Xxxx, Xxxxx 000
000 Xxxx Xxxxxxxxx, X.X.
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: President
If to the Executive: Xxxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxxxx Xxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
6. AMENDMENT OR WAIVER.
--------------------
No provision in this Agreement may be amended unless such
amendment is agreed to in writing, signed by the Consultant and by an authorized
officer of WTX. No waiver by either party hereto of any breach by the other
party of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of a similar or dissimilar provision or
condition at the same or any prior or subsequent time. Any waiver must be in
writing and signed by the Consultant or an authorized officer of WTX, as the
case may be.
7. SEVERABILITY.
-------------
In the event that any provision of this Agreement shall be
held to be invalid or unenforceable for any reason, in whole or in part, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
8. HEADINGS.
---------
The headings of sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
9. COUNTERPARTS.
-------------
This Agreement may be executed in one or more counterparts.
10. ASSIGNMENTS.
------------
No rights or obligations under this Agreement may be assigned
or transferred by the Consultant except that the Consultant's rights to
compensation and benefits hereunder shall, in the event of death, pass to his
estate, or to his designated beneficiary, and may be transferred by will or
operation of law. In the event of a future disposition of (or including) the
properties and business of WTX, substantially as an entirety, by merger,
consolidation, sale of stock or assets or otherwise, then WTX shall require the
acquiring or surviving corporation (which shall be substituted for WTX
hereunder) to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that WTX would have been required to perform it
had no such disposition occurred. The Consultant's rights under this Agreement
shall not be transferable by assignment or otherwise, shall not be subject to
commutation or encumbrance and shall not be subject to the claims of the
Consultant's creditors.
11. ARBITRATION; INDEMNIFICATION.
-----------------------------
(a) Any controversy or claim arising out of or in connection
with this Agreement shall be settled by arbitration held in New York City in
accordance with the rules of the American Arbitration Association then in
effect, and judgment upon the award rendered (including an award for money
damages) may be entered in any court having jurisdiction. The costs of the
arbitration proceedings shall be borne by WTX. Either party may, without
inconsistency with this Agreement, seek from a court any interim or provisional
relief that may be necessary to protect the rights or property of that party
pending the arbitral tribunal's determination of the merits of the controversy.
(b) In addition to (and not in lieu of) any of the
Consultant's rights to indemnification or otherwise, contained in WTX's
certificate of incorporation, by-laws or any other agreement, if any action,
suit, proceeding (including any arbitration proceeding) or claim shall be
brought or asserted with respect to the enforcement or interpretation of this
Agreement or any provision contained herein, WTX, to the full extent permitted
by applicable law and its certificate of incorporation and by-laws as in effect
on the date hereof, hereby indemnifies the Consultant for his reasonable
attorneys' fees and other expenses incurred in connection with such action,
suit, proceeding or claim and agrees to pay or reimburse the same promptly upon
demand by the Consultant (plus interest at the applicable Federal rate provided
in Section 7872(f)(2) of the Internal Revenue Code of 1986, as amended),
provided that WTX shall not be obligated to indemnify the Consultant under this
Agreement with respect to any action, suit, proceeding or claim brought by the
Consultant in which it is finally determined that the Consultant's
interpretations of this Agreement at issue, taken as a whole, are less correct
than the interpretations asserted by WTX. WTX shall preserve and make available
to the Consultant all documents and information now or hereafter in the
possession of WTX which may be required by the Consultant for the prosecution or
defense of any such action, suit, proceeding or claim.
12. WITHHOLDING.
------------
WTX shall withhold from all amounts payable to the Consultant
under this Agreement all federal, state and local taxes required by law to be
withheld with respect to such payments.
13. NO MITIGATION OR OFFSET.
------------------------
The Consultant shall not be obligated to mitigate the amount
of any payment provided for under this Agreement by seeking other employment or
taking any other action nor shall the amount of any payment provided for herein
be reduced by amounts earned by the Consultant from other employment or
otherwise.
14. GOVERNING LAW.
--------------
This Agreement shall be governed by the laws of the State of
New York. IN WITNESS WHEREOF, the Consultant and WTX have caused this Agreement
to be executed as of the day and year first above written.
WORLDTEX, INC.
By: ____________________________
________________________________
Xxxxxxx X. Xxxxxx
WITHHOLDING AMOUNTS FROM FEBRUARY 18, 1999 PAYMENT
A. WTX PAYMENTS
------------
1. Section 3(a) - 300% of current salary $ 675,000
2. Section 3(c) - total of monthly
installments remaining 2,228,040
3. Section 5(a) - automobile 65,000
B. WITHHOLDING
-----------
1. Federal Supplemental Wage Withholding
(28%)
- $675,000 x 28% = $189,000
- 65,000 x 28% = 18,200 207,200
2. FICA Withholding (7.65% of first $68,400
plus 1.45% of balance)
- $ 68,400 x 7.65% =$5,232.60 35,343.10
- 2,076,586.49 (675,000 + 1,404,986.49
(p.v. of $2,228,040) + 65,000 -
68,400) x 1.45% = 30,110.50
C. NET CASH DUE TO RJM FEBRUARY 18, 1999 432,456.90
-------------------------------------
