January 28, 1999
Personal & Confidential
Xx. Xxxxxx Box
Chairman of the Board
Pluma, Inc.
0000 Xxxxx Xxxxxxxx Xxxx
P.O. Box 4431
Martinsville, VA 24112
Dear Xxxxxx:
This letter constitutes an agreement by Xxxxxx X. Xxxxxxx ("Xxxxxxx") to
assume the responsibilities of the Chief Executive Officer of Pluma, Inc.
("Pluma") during the period of its financial and operational restructuring. It
is understood by Xxxxxxx and Xxxxx that the term of this engagement is limited
to that period of time determined by them to be necessary to complete Pluma's
financial and operational restructuring. As such, this agreement can be
terminated by either party upon thirty (30) days written notice.
Xxxxxxx agrees to act as, and assume the responsibilities of, Xxxxx's Chief
Executive Officer, as more specifically set forth herein, and Xxxxx agrees to
engage Xxxxxxx in such capacity upon the following terms and provisions:
(1) Xxxxxxx agrees to expend no less than three (3) days, but no more than
four (4) days during each calendar week performing his obligations to Xxxxx as
set forth herein. Although Xxxxxxx will expend as much time at Pluma's executive
offices as Xxxxxxx and Xxxxx xxxx necessary for the proper performance of his
duties hereunder, it is understood that a portion of Xxxxxxx'x work related to
Pluma may be performed from the offices of Xxxxxxx & Company in Charlotte, North
Carolina.
Xx. Xxxxxx Box
January 28, 1999
Page 2
(2) In addition to routine responsibilities of any chief executive officer,
the following shall constitute, but shall in no way limit, Xxxxxxx'x duties to
be performed hereunder:
(a) Assume and maintain overall executive authority and responsibility
for Pluma during the term of this agreement;
(b) Oversee the execution of the 1999 Business Plan and related
Initiatives lists by keeping the management team and its advisors
(collectively the "Recovery Team") focused on the priority action steps and
objectives;
(c) Where needed, resolve issues and/or disagreements among the
Recovery Team in a timely fashion;
(d) Communicate regularly with Pluma's employees, the Board of
Directors and appropriate external constituencies, including the Bank
Group;
(e) Develop and implement Pluma's financial and recapitalization
strategy;
(f) Develop and implement the specifics of Pluma's strategy with
regard to trade suppliers;
(g) Oversee appropriate action steps regarding sale of assets not
contemplated as part of the ongoing business (e.g., Rocky Mount facility);
and
(h) Perform other duties assigned by the Board of Directors.
(3) As compensation for Xxxxxxx'x services to be performed hereunder,
Xxxxxxx shall be paid on a monthly basis as follows:
(a) During any month in which Xxxxxxx has averaged working three full
days per week performing his responsibilities hereunder, Xxxxxxx shall be
paid the sum of $24,000 for such month.
(b) During any month in which Xxxxxxx has averaged working four full
days per week performing his responsibilities hereunder, Xxxxxxx shall be
paid the sum of $32,000 for such month.
(c) During any month in which Xxxxxxx has averaged between three
working days and four working days per week performing his responsibilities
hereunder, Xxxxxxx shall be paid between $24,000 and $32,000 for such
month. The exact amount to be paid Xxxxxxx
Xx. Xxxxxx Box
January 28, 1999
Page 3
under this subparagraph 3(c) shall be determined on a prorated basis. In
this event, Xxxxxxx shall submit to Pluma an invoice for services rendered
with appropriate adjustments to account for such proration.
Although Xxxxxxx is assuming the responsibilities of Pluma's chief
executive officer hereunder, Xxxxx and Xxxxxxx acknowledge that he will not be
an employee of Pluma for purposes of federal and state income tax withholding
laws or any other purpose.
(4) In addition to the sums to be paid to Xxxxxxx in Paragraph 3 above, and
to compensate Xxxxxxx for loss of other business resulting from the
concentration of time required for the performance of his duties hereunder,
Pluma shall pay to Xxxxxxx $32,000 in each of the first two calendar months
after this agreement is terminated.
(5) During the term of this agreement, Xxxxxxx agrees to waive, on a
prorated basis, any annual retainer due him from Pluma as a result of Xxxxxxx'x
duties as a member of Pluma's Board of Directors.
Sincerely,
XXXXXX X. XXXXXXX
Agreed and Accepted this ___ day of ________________, 1999
PLUMA, INC.
By: ______________________________
Xx. Xxxxxx Box
Chairman of the Board
