EMPLOYEMENT AGREEMENT
This Agreement is made and entered into as of this _____ day of ________, 1996,
by and between PLUMA, INC., a North Carolina corporation ("Employer"), and
__________________________ ("Employee").
WHEREAS, Employer desires to engage the services of Employee in
connection with its business; and
WHEREAS, Employee desires to be employed by Employer;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants hereinafter set forth, and of other good and valuable consideration,
the receipt and sufficiency of which are mutually acknowledged, the parties
hereto agree as follows:
1. AGREEMENT OF EMPLOYEMENT.
Employer hereby agrees to employ Employee, and Employee hereby agrees
to become and to remain employed by Employer, subject to the terms and
conditions hereinafter set forth.
2. DUTIES OF EMPLOYEES.
a. The Board of Directors of Employer shall elect Employee to the
office of VICE PRESIDENT-CONTROLLER, and to such other office or
offices as it shall determine. Employee agrees to serve in such
capacity or capacities and to carry out the duties incident thereto,
and such other duties as may otherwise be assigned to her from time to
time by the Board of Directors of Employer or the Chief Executive
Officer of Employer, competently, diligently and in a businesslike and
professional manner. The Employer shall retain full direction and
control of the means and methods by which Employee performs the above
services and of the place(s) at which such services are to be provided.
b. Employee shall be a full-time employee of Employer and, while so
employed, shall engage in no other business, profession or employment
activity (whether or not pursued for pecuniary advantage) that is or
may be competitive with, or that might place her in a competing
position to that of the Employer or any Affiliate of Employer.
3. TERM
The initial term of this Agreement and of Employee's employment
hereunder shall continue from the date hereof, and, unless sooner terminated
pursuant hereto, shall end on the second anniversary date hereof. Subsequent to
the second anniversary date hereof, the term of this Agreement shall be for an
undefined duration, said employment being at will, subject to termination by
either party at any time, provided, any termination of Employee's at will
employment shall be subject to the Employee's rights set forth in Section 5 of
this Agreement.
4. SALARY AND BENEFITS.
A. SALARY. Employer will pay to Employee an initial salary computed on
the basis of______________________ per year, payable in installments in
accordance with Employer's normal payroll practices. Employee shall be
eligible to be considered for salary increases in accordance with
Employer's salary administration practices for senior officer
personnel. Employee shall be a participant in any incentive
compensation plan for senior management personnel of Employer at a
level to be determined in the discretion of Employer.
1
B.REIMBURSABLE EXPENSES. Employer shall reimburse Employee for all
reasonable travel, lodging, entertainment and other expense incurred in
the performance of her duties as outlined in the Company's Expense
Reimbursement policy. Employee agrees to keep and maintain such records
of the aforesaid expenses as Employer may reasonably require.
C. BENEFITS. Employer will make available to Employee, during the term
of her employment hereunder, all benefits made available to other
senior officers of Employer under any employee benefit plans
established by Employer, including, without limitation, any pension and
profit-sharing plans, medical, hospitalization, or disability insurance
plans, but only to the extent that Employee is eligible and qualifies
to participate under the terms of the particular plan or plans, subject
to the same conditions and limitations as are applicable to other
senior officers of Employer. Nothing herein shall obligate Employer to
implement, maintain or continue any plan or plans.
5. TERMINATION
a. If the termination of this Agreement has not sooner occurred by the
action of either party, Employee's employment hereunder shall terminate
upon the occurrence of either of the following:
(1) UPON THE DEATH OF EMPLOYEE. In the event of the death of
the Employee during her employment under this Agreement, the
following payments shall be made to the Employee's designated
beneficiary, or, in the absence of such designation, to the
estate or other legal representative of the Employee: (i) her
base salary for the month in which her death occurs, and (ii)
such bonuses (if any) as have been earned by the Employee and
not paid to her at the time of her death. Any rights and
benefits the Employee or her estate or any other person may
have under employee benefit plans and programs of the Employer
generally in the event of the Employee's death shall be
determined in accordance with the terms of such plans and
programs. Except as provided in this Section 5a.(1), neither
the Employee's estate nor any other person shall have any
rights or claims against the Employer in the event of the
death of the Employee during her employment hereunder;
(2) AT EMPLOYER'S ELECTION, "FOR CAUSE." A termination For
Cause shall mean the occurrence of any one of the following
events:
(a) termination due to (i) willful or gross neglect of
duties for which employed, or (ii) willful misconduct in
the performance of duties for which employed, in either
such instance so as to cause material harm to the
Employer, all such facts to be determined in good faith
by the Board of Directors of the Employer;
(b) termination due to the Employee's committing fraud,
misappropriation or embezzlement in the performance of
her duties as an employee of the Employer; or
(c) termination due to the Employee's committing any
felony for which he is convicted and which, as determined
in good faith by the Board of Directors of the Employer,
constitutes a crime involving moral turpitued.
2
Upon termination for Cause, the Employee shall receive
her base salary only through the date of termination, and
neither the Employee nor any other person shall be
entitled to any further payments from the Employer, for
salary, unpaid bonuses or any other amounts. Any rights
and benefits the Employee may have under employee benefit
plans and programs of the Employee generally following a
termination of the Employee's employment For Cause shall
be determined in accordance with the terms of such plans
and programs.
(3) CHANGE OF CONTROL. At the election of Employee or Employer
upon a "Change of Control" of Employer, provided that notice
of such termination is given by either party to the other
after such Change of Control. A Change of Control shall mean
the occurrence of any one of the following events:
(a) any "person," as such term is used Section 13 (d)
and 14 (d) of the Securities and Exchange Act of 1934
(the "Act") (other than the Employer, any trustee,
fiduciary or other person or entity holding securities
under any employee benefit plan of the Employer),
together with all "affiliates" and "associates" (as such
terms are defined in Rule 13d-3 under the Act), directly
or indirectly, of securities of the Employer
representing 50% or more of either (i) the combined
voting power of the Employer's then outstanding
securities having the right to vote in an election of
the Employer's Board of Directors ("Voting Securities")
or (ii) the then outstanding Shares of the Employer (in
either such case other than as a result of acquisition
of securities directly from the Employer); or
(b) the majority of those persons who, as of January 1,
1996, constitute the Employer's Board of Directors (the
"Incumbent Directors") cease for any reason, including,
without limitation, as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at
least a majority of the Board, provided that any person
becoming a director of the Employer subsequent to
January 1, 1996 whose election or nomination for
election was approved by a vote of at least a majority
of the Incumbent Directors shall, for purposes of this
Plan, be considered an Incumbent Director; or
(c) the shareholders of the Employer shall approve (i)
any consolidated or merger of the Employer where the
shareholders of the Employer, immediately prior to the
consolidation or merger, would not, immediately after
the consolidation or merger, benefically own (such as
term is defined in Rule 13d-3 under the Act), directly
or indirectly, shares representing in the aggregate 50%
of the voting shares of the corporation issuing cash or
securities in the consolidation or merger (or of its
ultimate parent corporation, if any), (ii) any sale,
lease, exchange or other contemplated disposition
(arranged by a party as a single plan) of all or
substantially all of the assets of the Employer or (iii)
any plan or proposal for the liquidation or dissolution
of the Employer.
Notwithstanding the foregoing, a "Change in Control" shall not be deemed
to have occurred for purposes of the foregoing clause 5.(3) soley as the
result of an acquisition of securities by the Employer which, by
reducing the number of Shares or other Voting Securities outstanding,
increases (x) the proportionate number of
3
Shares beneficially owned by any person to 50% or more of the
Shares then outstanding or (y) the proportionate voting power
represented by the Voting Securities beneficially owned by any
person to 50% or more of the combined voting power of all then
outstanding Voting Securities; provided, however, that if any
person referred to in clause (x) or (y) of this sentence shall
thereafter become the beneficial owner of any additional
Shares of other Voting Securities (other than pursuant to a
stock split, stock dividend, or similar transaction), then a
"Change of Control" shall be deemed to have occurred for
purposes of the foregoing clause (3). Upon termination of this
Agreement under this SEction 5a(3), if the Employee is
eligible [as defined below], Employer shall:
(a) Within 30 days after termination upon a Change in
Control, pay to Employee an amount, in cash, equal to:
(A) three times the Employee's (i) average annual salary
for the thirty-six (36) month period prior to such
Change in Control, and (ii) bonuses received during the
eighteen months preceding the effective date of the
Change in Control, less (b) 1/36 of the amount
calculated in (a) immediately above for each month that
the Employee remains employed with Employer following
the effective date of the Change in Control; and
(b) If allowed to do so by the Company's insurance
carrier, or under the terms of the Company's insurance
plan in effect at the time of termination (in the event
the Company is a self-insured or partial self-insurer),
continue the medical, disability and life insurance
benefits which Employee was receiving at the time of
termination for a period of thirty-six (36) months after
termination of employment (the cost of which shall be
borne by Employer or Employee as set forth below) or, if
earlier, until Employee has commenced employment
elsewhere and become eligible for participation in the
medical, disability and life insurance programs, if any,
of the successor employer. Coverage under Employer's
medical, disability and life insurance programs shall
cease with respect to each such program as Employee
becomes eligible for the medical, disability and life
insurance programs, if any, of the successor employer.
During the first eighteen (18) months of such thirty-six
(36) month period, the Employer shall be responsible for
the costs associated with continued insurance coverage
for Employee, but only to the extent it would have been
responsible for such costs if the Employee was still
employed by the Company. The Employee shall be
responsible for the remaining costs. If, at the end of
18 months, the Employee is still afforded medical,
disability and life insurance coverage under the
Employer's insurance programs, Employer shall arrange to
provide continued coverage under said programs, but the
Employee will be responsible for the total cost of all
such continued coverage at the end of the first eighteen
(18) month period specified above.
The Employee is eligible for the benefits provided in
this Section 5a(3), unless the Employer or the
Employer's successor, after a Change in Control, offers
the Employee a bona fide employment contract for a term
which would expire no earlier than three years after the
effective date of the Change in Control under the terms
of which the Employee would perform the same duties for
the same or greater levels of compensation as were
afforded under the terms of this AGreement and this
offer is rejected by the Employee.
4
In addition, in the event Employee's employment with the
Company is terminated within 90 days before a Change in
Control occurs for a reason not described in Section
5a(1), (2) or (4), then in such event, Employee shall be
entitled to those payments and other befits described in
subparagraphs (a) and (b) of page 4 of this Section 5a.
upon such termination.
(4) AT EMPLOYER'S ELECTION IN THE EVENT OF EMPLOYEE'S
LONG-TERM DISABILITY. In the event of the Employee's
disability (as hereinafter defined) during her
employement under this Agreement, the Period of
Employment may be terminated by the Employer. For the
fist three months following termination of employement
due to disability, the Employee shall be paid her base
salary at the rate in effect at the time of the
commencement of disability. Thereafter, the Employee
shall be entitled to benefits in accordance with and
subject to the terms and provision of the Employer's
long-term disability plans for senior management
employees, as in effect at the time of the commencement
of disability. For purposes of this Agreement,
"disability" shall have the same meaning as given that
term under the Employer's long-term disability plan for
senior management employees, as in effect from time to
time. Anything herein to the contrary notwithstanding,
if, during the three month period following a
termination of employment under this Section 5a.(4) in
which salary continuation payments are payable by the
Employer, the Employee becomes re-employed or otherwise
engaged (whether as an employee, partner, consultant, or
otherwise), any salary or other renumeration or benefits
earned by her from such employement or engagement shall
not offset any payments due her under this Section
5a.(4). In the event of the Employee's disability, any
rights and benefits the Employee may have under employee
benefit plans and programs of the Employer generally
shall be determined in accordance with the terms of such
plans and programs. Upon termination of the Employee's
employment by reason of disability under this SEction
5a.(4), the Employee shall be entitled, in addition to
the other payments provided for in this Section 5a.(4),
to payment of such bonuses (if any) as may have been
earned by the Employee and not paid to her at the time
of such termination. Except as provided in this Section
5a.(4), neither the Employee nor her estate, or any
other person, shall have any rights or claims against
the Employer in the event of the termination of the
Employee's employement by reason of disability.
b. Except as provided in 5a. above and as might be provided
specifically in separate stock option or other employee benefit plans, upon
termination of this AGreement, Employee's rights to further compensation and
benefits hereunder shall cease, provided, however, that Employee shall remain
entitled to any unpaid compensation and benefits accrued prior to such
termination and to any expense reimbursements to which he was entitled at the
date of such termination, and any rights to which he is entitled by law or
pursuant to benefit plans of Employer in the event of death
disability.
6. CONFIDENTIALITY.
A. CONFIDENTIALITY INFORMATION. The Employee promises and
agrees that he will not, either while in the Employer's
employ or at any time thereafter, disclose to any person not
employed by the Employer, or not engaged to render services
to the Employer, or use, for herself or any other person,
firm, corporation or entity, any confidential information of
the Employer obtained by her while in the employ of the
Employer, including, without limitation, any of the
Employer's methods, processes, techniques, practices,
research data, marketing and sales information, personnnel
data, customer lists, financial data, plans, know-how, trade
secrets and proprietary information of the Employer;
provided, however that this provision
5
shall not preclude the Employee from use or disclosure of
information known generally to the public [other than
information known generally to the public as a result of a
violation of this Section 6a. by the Employee], from use or
disclosure of information acquired by the Employee outside of
her affiliation with the EMployer, from disclosure reuired by
law or court order, or from disclousre or use approprite and
in the ordinary course of carrying out her duties as an
employee of the Employer.
B. RIGHTS TO MATERIALS. The Employee further promises and
agrees that, upon termination of her employemtn for whatever
reason and at whatever time, he will not take with her,
without the prior written consent of an officer authorized to
act in the matter of the Board of Directrs of the EMployer,
any records, files, memoranda, reports, customer lists,
drawings, plans, sketches, documents, specifications, and the
like (or any copies thereof) relating to the busienss of the
Employer or any of its current or future Affilaited
Companies.
7. INJUNCTIVE RELIEF.
The Employee acknowledges and agrees that the Employer would suffer
irreparable injury in the event of a breach by her or any of the provisions of
Section 6 of this Agreement and that the Emploer shall be entitled to an
injunction restraining her from any breach or threatened breach thereof. The
Employee further agress that, in the event of her breach of any provsion of
Section 6 hereof, the Employer shall be entitled to terminate its obligation to
make any payemnts otherwise due and payable to the Employee hereudner. Nothing
herein shall be construed, however, as prohbigitng the Employer from pursing any
other remedies at law or in equity which it may have for any such breach or
threatened breach of any provision of Section 6 hereof, including the recoevery
of damages from the Employee.
8. NOTICES.
All notices required or permitted hereunder shall be in writing and
shall be delievered personally or by facsimile or sent by United States
registred or certified mail, postage prepaid, addressed to Employer at X.X. Xxx
000, Xxxx, Xxxxx Xxxxxxx 00000 and to Employee at 0000 Xxxxxx Xxxxxx Xxx., Xxx.
000, Xxxxxxxxxxxx, Xxxxxxxx 00000, or at such changed addresses as the
aforementioned may disignate in writing. Any such notice shall be deemed given
and effectiv when recieved at the aforesaid address or facsimile number.
9. MISCELLANEOUS.
This Agreement shall be binding upon and shall inure to the benfit of
the parties hereto, and their heirs, executors, administrators, and personal
representatives, successors, and sassigns. Paragraph headins are for convenience
covenants herein, the performance of which mayextrend beyond the term of this
Agreement, shall be deemd to survice the termination of thisAGreement. This
Agreement constitues the entire agreement between the parties hereto pertaining
to the subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings of the parties, and there are not warranties,
representations or other agreements betweent he parties in connectin with the
subject matter hereof except as specifically set forth herein. This agreement
shall be governed in all respects by the internal laws of the State of Nrorht
Carolina. In the event any term or provsion hereof is unenforceable or invalid
for any reaons whatsoever or as applied to a particular cirucmstance, such term
or provision shall be modified to the extent necessary to make it valid and
enforecable, or shall be stricken herefrom, as the circumstances may require,
and this Agreement shall be construed as if such term or provsion (to such
exten) had originally been included herein, as the case may be.
6
IN WITNESS WHEREOF, the parties have executed this Agreement in
contuerparty on the date first above written.
PLUMA, INC.
By:
R. XXXX XXXXXXX, XX., President & CEO
7
