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EXHIBIT 10.27
EMPLOYMENT AGREEMENT
This Agreement is made and entered into as of the 20th day of
March, 1998, by and between Xxxxxxxx Industries, Inc., a Delaware corporation
(hereinafter called the "Company") and D. Xxxxx Xxxx (hereinafter called
"Officer").
WITNESSETH:
WHEREAS, the Company is engaged in various aspects of the textile
industry, including the manufacture, marketing and sale of fabrics for use in
the automotive, industrial, home, hospitality and certain specialty markets (the
"Business"); and
WHEREAS, Officer desires to become employed by the Company as President
and Chief Executive Officer for the Company and the Company desires to employ
Officer in such capacity pursuant to the terms hereof.
NOW THEREFORE, FOR AND IN CONSIDERATION of the mutual representations
and promises herein contained, and other good and valuable consideration, the
receipt, sufficiency and adequacy of which are hereby acknowledged, the parties
mutually agree as follows:
1. EMPLOYMENT; TERM. Commencing March 19, 1998 (the "Effective Date"), the
Company employs Officer and Officer accepts employment with the Company in the
position of President and Chief Executive Officer for the Company upon the terms
and conditions hereinafter set forth. The initial term of this Agreement shall
be for three (3) years from and including the Effective Date (the "Initial
Term"), unless sooner terminated pursuant to Section 4 below; provided, however,
that this Agreement shall automatically extend for subsequent terms of one year
in length on the third anniversary of the Agreement and each subsequent
anniversary date unless the Company or Officer shall give notice to the other
party of their decision not to extend the term of this Agreement by giving at
least ninety (90) days written notice prior to the end of such Initial Term or a
successive term.
2. DUTIES AND EXTENT OF SERVICES. Officer will, during the continuance of
his employment hereunder, perform the duties of President and Chief Executive
Officer as such duties are defined in the By-laws of the Company, which duties
shall include responsibility for (i) the day to day general management,
administration and operation of all present and future business of the Company
and its subsidiaries and (ii) the supervision of the present and future
manufacturing operations of the Company and its subsidiaries. On all matters not
delegated to Officer, Officer shall report to the Board. Officer's office and
principal place of employment will be located in Columbus, Georgia. Officer
acknowledges that his duties and services will involve usual and customary
travel required of the Company's employees currently located in Columbus,
Georgia. Excluding periods
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of vacation and sick leave to which the Officer is entitled, the Officer agrees
to devote the whole of his business attention, working time and energy to the
business and affairs of the Company and to use his best efforts to perform the
responsibilities assigned to him hereunder faithfully and efficiently. Without
the prior written consent of the Company, the Officer shall not serve as an
employee, officer, director, consultant or advisor to any other business, and
shall not engage in any other business activities other than the Permitted
Activities, as herein defined. The Officer may (i) make and manage personal
business investments of his choice, provided that the Officer shall hold no
investment in any entity which competes in any way with the Company, other than
an investment representing less than a 5% interest in any publicly held entity;
and (ii) serve in any capacity with any civic, educational or charitable
organization without seeking or obtaining approval by the Board (collectively,
the "Permitted Activities"), provided that the Permitted Activities do not
materially interfere or conflict with the performance of Officer's duties
hereunder or create any conflict of interest with such duties.
3. COMPENSATION.
(a) Base Salary. For all services to be rendered by
Officer in any capacity during the period of his employment under this
Agreement, including, without limitation, services as an officer and/or director
of any subsidiary of the Company, Officer shall be paid as compensation a base
salary ("Base Salary") at the rate of not less than $450,000 per annum for each
year during which Officer is employed under this Agreement, or at such higher
rate as may from time to time be fixed by the Compensation Committee of the
Board of the Company, payable in accordance with the customary payroll practices
of the Company, but in no event less frequently than monthly. Under no
circumstance shall any increase in Base Salary limit or reduce any other
obligation to Officer under this Agreement.
(b) Bonuses. Upon execution of this Agreement, Officer
shall be entitled to a signing bonus of $100,000, payable in a lump sum. For the
first completed year of the Initial Term hereunder, Officer shall be entitled to
an annual bonus in an amount equal to $225,000. In addition, the Officer shall
be eligible, for each subsequent year of the term of this Agreement, to an
annual bonus to such extent and in such amount as shall be determined by the
Compensation Committee of the Board of Directors in its sole discretion. Bonuses
are not prorated and shall only be paid for completed years.
(c) Relocation Expenses. Officer shall relocate to
Columbus, Georgia within six months of the Effective Date. For a period not to
exceed six months, the Company shall pay reasonable temporary living expenses
for Officer in Columbus, Georgia. The Company shall pay, or reimburse Officer
for, reasonable relocation expenses incurred by him in connection with moving to
Columbus, Georgia.
(d) Reimbursement of Expenses. The Company shall pay, or
reimburse Officer, in accordance with the Company's prevailing corporate policy,
for reasonable
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travel, continuing education and other expenses incurred by Officer in
performing his duties under this Agreement.
(e) Participation in Employee Benefit Plans. In addition
to the other compensation provided for herein, Officer shall be entitled to
participate in those perquisites and benefits generally available to senior
level employees of the Company in accordance with the Company's regular
policies. In addition, Officer shall be entitled to participate in various
benefit plans which the Board may establish for executive management. The
foregoing notwithstanding, the Company may change or discontinue any such
benefits; provided, however, that so long as any benefit is made available to
executive officers or employees generally, such benefit will be extended to
Officer on the same terms as such benefit is made available to other executive
officers or employees.
(f) Vacation. During the term of this Agreement and any
renewal term, Officer shall be entitled to paid vacation in accordance with the
policies and practices of the Company; provided, that such vacation shall be
taken in a manner so as not to interfere with the performance of Officer's
duties hereunder.
(g) Stock Options. Officer shall, upon execution of this
Agreement, be granted options to purchase an aggregate of 300,000 shares of the
Company's common stock, pursuant to the Company's Amended and Restated Stock
Incentive Plan (the "Plan"), as amended, which options shall be exercisable at a
price of $5.875 per share. Such options shall be incentive stock options to the
extent permitted by law. Such options shall vest, subject to the terms of the
Plan, in equal amounts upon the first, second and third anniversaries of the
Effective Date, subject to continued employment by the Company; provided that
such vesting shall accelerate upon a change of control of the Company, as
defined by the Plan, or upon termination of Officer's employment by the Company
without cause. Such options shall be represented by a stock option agreement and
shall otherwise be subject to all applicable provisions of the Plan.
4. TERMINATION OF AGREEMENT.
(a) Termination of Employment by Company For Cause;
Resignation by Employee. The Company may terminate Officer's employment at any
time for "Cause" but only after written notice of termination to Officer as
approved by the Board (excluding Officer) as set forth below specifying the
cause of such action. Cause shall mean: (a) misappropriating any funds or any
material property of the Company; (b) obtaining or attempting to obtain any
material personal profit from any transaction, other than is contemplated by
this Agreement, in which Officer has an interest which is adverse to the
interest of the Company unless the Company shall first give its written consent
to such transaction; (c) neglecting or refusing to perform the duties
contemplated by this Agreement, the willful taking of actions which directly
impair the Officer's ability to perform his duties contemplated by this
Agreement, material breach of any term of this Agreement or taking any action
detrimental to the Company's good will or damaging the Company's relationship
with its customers, suppliers or employees, provided that such
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neglect or refusal, action or breach shall have continued for a period of 20
days following written notice thereof; (d) being convicted of or pleading guilty
or nolo contendere to any crime or offense constituting a felony under
applicable law or any crime or offense involving fraud or moral turpitude or (e)
any material intentional failure to comply with laws or governmental regulations
applicable to the Company or the conduct of the Company's business. Any
termination by the Company pursuant to this Section 4(a) above shall be
communicated by written notice of termination. In the event Officer shall be
terminated for Cause or shall resign from the Company prior to the expiration of
the term hereof, Officer shall be entitled to all salary actually earned prior
to termination, vested stock options and other vested benefits. Officer shall
not be entitled to any severance pay or prorated bonus in the event of
termination pursuant to this Section 4(a) for Cause or resignation.
(b) Termination of Employment in the Event of Officer's
Disability. If, in the reasonable, good faith opinion of the Board, as a result
of Officer's incapacity due to physical or mental illness, Officer shall have
been absent from his duties with the Company on a substantially continuous basis
for a period of six months, Officer's employment shall be terminated for
Disability. In the event Officer shall be terminated for "Disability," Officer
shall be entitled to all salary actually earned prior to termination, vested
stock options and other vested benefits, and to any benefits to which Officer
may be entitled under any Company-sponsored disability plan providing benefits
to Officer. Officer's employment shall not be terminable under this Section 4(b)
if Officer is absent from his duties upon an unexpired bona fide leave of
absence granted by the Company other than pursuant to physical or mental
illness.
(c) Termination of Employment in the Event of Death
During Employment. If Officer dies during the term of this Agreement, the
Agreement shall immediately terminate and the Company shall pay to Officer's
estate compensation which would otherwise be payable to Officer pursuant to this
Agreement up to the end of the month in which his death occurs. The Officer's
estate shall also be entitled to any vested stock options and other vested
benefits.
(d) Termination of Employment Without Cause; Constructive
Termination. If, during the term of this Agreement, the Company shall terminate
the Officer's employment with the Company (other than as a result of Disability)
without Cause, or the Officer shall terminate his employment with the Company as
a result of a material breach by the Company of the terms hereof, which breach
is not cured within thirty (30) days following receipt of notice in writing from
the Officer to the Company specifying the nature of such breach:
(i) In addition to such amounts as have accrued
prior to the date of termination and have not previously been paid, the Company
shall pay to the Officer, payable at the Company's discretion either in a lump
sum or at the time such payments would otherwise be payable hereunder, an amount
equal to one times Officer's then Base Salary.
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(ii) The Company shall, promptly upon submission by the
Officer of supporting documentation, pay or reimburse, or cause to be paid or
reimbursed, to the Officer any business related costs and expenses paid or
incurred by the Officer on or before the date of termination which would have
been payable under Section 3(c) if the Officer's employment had not been
terminated.
(iii) During the term payments are made pursuant to clause
(a) above, the Company shall continue to provide health and welfare benefits (or
equivalent coverage) to the Officer and/or the Officer's family at least equal
to those which would have been provided to them in accordance with the plans,
programs and policies of the Company from time to time in effect if the
Officer's employment had not been terminated.
(iv) Notwithstanding the above, all sums payable and
benefits provided to the Officer pursuant to Sections 4(d)(i) and (iii) above
shall promptly cease at such time as Officer becomes employed on a full time
basis with another company.
5. OFFICER'S OBLIGATIONS UPON TERMINATION OF EMPLOYMENT.
Upon the termination of his employment hereunder for whatever reason
Officer shall:
(a) Forthwith tender his resignation from any directorship or
office he may hold in the Company;
(b) Not at any time represent himself still to be connected or to
have any connection with the Company; and
(c) Refrain from taking any action or making any statement
intended to damage the reputation of or disparage the Company in any manner.
6. EFFECT OF TERMINATION. The provisions of this Agreement shall survive
the termination of this Agreement and the termination of Officer's employment
with the Company to the extent required to give full effect to the covenants and
agreements contained herein.
7. CONFIDENTIALITY.
(a) Officer agrees that, both during the term of this Agreement
and after the termination of this Agreement, Officer will hold in a fiduciary
capacity for the benefit of the Company, and shall not, directly or indirectly,
use or disclose, except as authorized by the Company in connection with the
performance of Officer's duties, any Confidential Information, as defined
hereinafter, that Officer may have or acquire (whether or not developed or
compiled by Officer and whether or not Officer has been authorized to have
access to such Confidential Information) during the term of this Agreement. The
term
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"Confidential Information" as used in this Agreement shall mean and include any
material information, data and know-how relating to the business of the Company
that is disclosed to Officer by the Company or known by him as a result of his
relationship with the Company and not generally within the public domain
(whether constituting a trade secret or not), including without limitation, the
following: financial information, supply and service information, marketing
information, personnel information, customer information and information with
respect to any corporate affairs that the Company treats as confidential. The
term "Confidential Information" does not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right of the Company or the
client to which such information pertains.
(b) The covenant contained in this Section 7 shall survive the
termination of Officer's employment with the Company for any reason for a period
of two (2) years; provided, however, that with respect to those items of
Confidential Information which constitute trade secrets under applicable law,
Officer's obligations of confidentiality and non-disclosure as set forth in this
Section 7 shall continue to survive after said two (2) year period to the
greatest extent permitted by applicable law. These rights of the Company are in
addition to those rights the Company has under the common law or applicable
statutes for the protection of trade secrets. Officer agrees that the promises
of confidentiality made in this Section 7 are necessary to protect the Company's
legitimate business interests.
8. COVENANT NOT TO COMPETE. During the term of this Agreement and for a
period of one year following the termination of Officer's employment hereunder
for any reason (the "Non-competition Period"), Officer shall not, except as
authorized in writing by the Company, directly or indirectly, be employed by,
render services to, assist or participate in, as an executive or senior officer
or in an executive capacity, the affairs of, invest in, or otherwise serve in
any executive capacity with, any person or enterprise which person or enterprise
is engaged in, or is planning to engage in, any business that is in any respect
competitive with the Business, with respect to any product of the Business,
within the continental United States; provided that Officer may hold investments
representing a less than 5% interest in any publically held company competing
with the Company. In furtherance of such covenant not to compete, Officer hereby
acknowledges that the Company currently does business and will continue to do
business throughout the term of this Agreement throughout the United States and
that in his capacity as President and Chief Executive Officer of the Company his
responsibilities will involve all aspects of the Company's Business and the
conduct of business throughout the United States.
9. NON-SOLICITATION OF OFFICERS, KEY EMPLOYEES AND CUSTOMERS. Officer
agrees that he will, for so long as he is employed hereunder and for the
Non-competition Period after termination of his employment for any reason,
within the continental United States, (a) refrain from actively soliciting,
recruiting or hiring, or attempting to recruit or hire, directly or by assisting
others, any other officer or key employee of the Company who is employed by the
Company or any successor or affiliate
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of the Company and/or (b) refrain from calling on or soliciting, directly or
indirectly, any of the customers or suppliers of the Company or any successor or
affiliate of the Company who he served or contacted during his employment with
the Company to provide goods or services related to the Business of the Company,
nor during such period shall the Officer make known to any other person the
names or addresses of such customers or suppliers or any information relating in
any manner to the Company's trade or business relationships with such customers
or suppliers.
10. ACKNOWLEDGMENTS. Officer hereby acknowledges and agrees that the
restrictions contained in Sections 7, 8 and 9 are fair and reasonable and
necessary for the protection of the legitimate business interests of the
Company. Officer acknowledges that in the event Officer's employment with the
Company terminates for any reason, Officer will be able to earn a livelihood
without violating the restrictions contained in Sections 7, 8 and 9.
11. RIGHTS TO MATERIALS. All records, files, memoranda, reports, price
lists, customer lists, drawings, plans, sketches, documents and the like
(together with all copies thereof) relating to the business of the Company,
which Officer shall use or prepare or come in contact with in the course of, or
as a result of, his employment shall, as between the parties hereto, remain the
sole property of the Company. Upon the termination of his employment or upon the
demand of the Company, he shall immediately return all such materials and shall
not thereafter cause removal thereof from the premises of the Company.
12. INJUNCTIVE RELIEF. Officer understands, acknowledges and agrees that in
the event of a breach or threatened breach of any of the covenants and promises
contained in Sections 7, 8 and 9, the Company will suffer irreparable injury for
which there is no adequate remedy at law and the Company will therefore be
entitled to injunctive relief enjoining said breach or threatened breach.
Officer further acknowledges, however, that the Company shall have the right to
seek a remedy at law as well as or in lieu of equitable relief in the event of
any such breach.
13. ENTIRE AGREEMENT; GOVERNING LAW; AMENDMENTS AND WAIVERS. This Agreement
sets forth the entire understanding of the parties and supersedes all prior
agreements or understandings, whether written or oral, with respect to the
subject matter hereof. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Georgia and any applicable federal laws of the
United States of America. No terms, conditions, warranties, other than those
contained herein, and no amendments or modifications hereto shall be binding
unless made in writing and signed by the parties hereto. No provisions of this
Agreement may be modified, waived, or discharged unless such waiver,
modification or discharge is agreed to in writing signed by Officer and the
Company acting through a duly authorized officer. No waiver by either party
hereto at any time of any
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breach by the other party hereto of, 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.
14. BINDING EFFECT. This Agreement shall inure to the benefit of and shall
be binding upon the Company, its successors and assigns. The obligations and
duties of the Officer hereunder are personal and otherwise not assignable. This
Agreement shall inure to the benefit of and be enforceable by the Officer's
legal representatives. Both Officer and the Company represent that he and it
have consulted with whomsoever he or it wished before executing this Agreement,
including but not limited to counsel of their respective choice.
15. NOTICE. For the purposes of this Agreement, notices, and all other
communication provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or mailed by United
States certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Company:
Xxxxxxxx Industries, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention:
If to Officer:
or, in either case, to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
16. TITLES. Titles of the headings herein are used solely for convenience
and shall not be used for interpretation or construing any work, section clause,
paragraph, or provision of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
18. ENFORCEMENT. The provisions of this Agreement may be enforced by all
legal and equitable remedies available to the parties including specific
performance and injunction. Nothing herein shall be construed as prohibiting
either party from pursuing any other remedies available to it, including
recovery of damages.
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19. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not effect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect. If any provision
of this Agreement is held to be illegal, invalid, or unenforceable under present
or future laws effective, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision 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
therefrom. Furthermore, in lieu of such illegal, invalid, or unenforceable
provision, there shall be added automatically as a part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and still be legal, valid or enforceable. It is
acknowledged that any payment which may be made by the Company to Officer under
this Agreement is in the nature of employment and/or severance and not a penalty
payment. Should the obligation to make any payment hereunder be held to be void
or voidable as a penalty by a final non-appealable judgment, this Agreement
shall be deemed to provide an obligation on the part of the Officer to render
such consulting services as the Company may reasonably request during the period
of and in exchange for such payments as would otherwise have been made by the
Company as severance benefits and the parties agree such payments shall
constitute reasonable compensation for the value of Officer's services during
such period.
20. ARBITRATION. Except as otherwise provided in this Agreement, the
Company and Officer hereby consent to the resolution by arbitration of all
claims or controversies for which a court otherwise would be authorized by law
to grant relief, in any way arising out of, relating to or associated with
Officer's employment with the Company or its termination, that the Company may
have against Officer or that Officer may have against the Company or against its
officers, directors, employees or agents in their capacity as such or otherwise,
whether or not such dispute concerns the formation or terms of this Agreement.
Any such arbitration shall be in accordance with the procedures of the American
Arbitration Association ("AAA"). The arbitration hearing will be held before an
experienced employment arbitrator or panel of arbitrators licensed to practice
law in the state of Georgia and selected by and in accordance with the rules of
the AAA, as the exclusive remedy for such claim or dispute. The forum for such
arbitration shall be Columbus, Georgia. The party seeking arbitration of a
dispute, claim or controversy as required by this Section 20 must give specific
written notice of any claim to the other party within six (6) months of the date
the party seeking arbitration first has knowledge of the event giving rise to a
claim or dispute; otherwise, the claim shall be void and deemed waived, even if
there is a federal or state statute of limitations which would have given more
time to pursue the claim. Notwithstanding the foregoing, the Company shall have
the right to seek temporary and/or preliminary injunctive relief in a court of
competent jurisdiction to enforce the terms of Sections 7, 8 and 9 hereof.
Moreover, this agreement to arbitrate does not apply to or cover other claims by
the Company or any non-party to the Agreement for injunctive and/or other
equitable relief for unfair competition and/or the use and/or unauthorized
disclosure of trade secrets or confidential information. The
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ultimate resolution of the underlying issues in such litigation, shall, however,
be subject to this Agreement by the parties to resolve any disputes by
arbitration as set forth herein.
IN WITNESS WHEREOF, the parties hereto have freely and voluntarily
executed this Agreement as of the date and year first written above.
XXXXXXXX INDUSTRIES, INC.
BY: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
Title: Chairman
Accepted and Agreed as of the
date first above written: Attest
/s/ D. Xxxxx Xxxx BY: /s/ Xxxxx X. Xxxxxx
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D. Xxxxx Xxxx Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
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