EMPLOYMENT AGREEMENT
AGREEMENT made and entered into as of January 1, 1997 (the
"Agreement"), by and between TEXFI INDUSTRIES, INC., a Delaware corporation with
offices at 0000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx ("Texfi" or the
"Company"), and Xxxx X. Xxxxx, ("Xxxxx").
W I T N E S S E T H:
WHEREAS, Texfi desires to employ Xxxxx and to enter into the Agreement
embodying the terms of such employment; and
WHEREAS, Xxxxx desires to accept such employment and to
enter into the Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree that the following provisions shall constitute the Agreement:
1. Employment. Texfi hereby employs Xxxxx and Xxxxx hereby
accepts employment with Texfi for the term set forth in Section 2
below, in the position and with the duties and responsibilities set forth in
Section 3 below, and upon the other terms and conditions hereinafter stated.
2. Term. Unless otherwise terminated as hereinafter
provided, the term of the Agreement shall commence on January 1, 1997, and shall
continue through December 31, 1999.
3. Position, Duties, Responsibilities, Extent of Services.
3.1. Position. It is intended that, at all times
during the term of the Agreement, Xxxxx shall serve as President of the Apparel
(Kingstree) Division. In accordance with such position, he is hereby granted
appropriate responsibilities, duties, and authorities,
subject to the direction of the Chief Executive Officer and the
President and Chief Operating Officer of the Company.
3.2. Extent of Services. During his employment under
this Agreement, Xxxxx shall devote his full time and attention to the business
and affairs of Texfi; provided, however, that nothing in this Agreement shall
preclude Xxxxx from engaging in charitable and civic activities or from managing
his personal investments so long as such outside activities do not unreasonably
interfere with the performance of his duties and responsibilities under this
Agreement.
4. Salary. For services rendered by him under this Agreement, Xxxxx
shall receive a base salary at the annual rate of $200,000 (the "Base Salary"),
payable at least in equal monthly installments, or such other amount as the
Company and Xxxxx may agree to from time to time.
5. Bonus. Xxxxx will be eligible to participate in the
incentive bonus plans in effect from time to time for senior executive officers
of the Blends Division of Texfi.
6. Employee Benefit Plans. Xxxxx will be provided
employee benefit programs comparable to those being provided by Texfi to
senior executive officers during the term of the Agreement.
7. Reimbursable Expenses.
7.1. Business Expenses. During the term of his employment
hereunder, Xxxxx shall be entitled to receive proper reimbursement for all
reasonable out-of-pocket
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expenses incurred by him (in accordance with the policies and procedures
established by Texfi for its senior executive officers) in performing services
hereunder, provided Xxxxx properly accounts therefor.
7.2. Automobile. During the term of his employment
hereunder, Texfi will pay to Xxxxx an automobile allowance of $500 per month.
8. Termination of Employment.
8.1. Death. In the event of the death of Xxxxx
during the term of this Agreement, the following payments shall be made to his
designated beneficiary or, in the absence of such designation, to his estate:
(a) his Base Salary, as provided in Section 4, through the end of the month in
which death occurs, and (b) any amounts due under Incentive Bonus Plans then in
effect in accordance with the terms of such plans.
8.2. Long-Term Disability. In the event that Xxxxx
shall suffer an illness or mental or physical disability or incapacity of such
a nature, degree or effect that he is unable to perform his duties hereunder
for a continuous period of six months or for shorter periods aggregating six
months within any 12-month period, the Company, at its sole option, may
terminate his employment and this Agreement. Upon such termination, Xxxxx,
shall be entitled to payment of (a) his Base Salary, as provided in Section 4,
through the end of the pay period in which the termination occurs, and (b) any
amounts due under Incentive Bonus Plans then in effect in accordance with the
terms of such plans.
8.3. For Cause. The Company shall have the right to
terminate the employment of Xxxxx and this Agreement for "cause." For
purposes of this Agreement, "cause" shall mean: (i) Xxxxx'x willful and
continued failure to perform substantially his duties
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under this Agreement (other than by reason of illness or mental or physical
disability or incapacity) for more than 60 days after a written demand for
substantial performance is delivered to him by the Board of Directors of the
Company, which demand specifically identifies the manner in which Xxxxx has not
substantially performed his duties; (ii) theft or misappropriation by Xxxxx of
assets of the Company; or (iii) actions by Xxxxx which constitute an act of
moral turpitude or that materially injure the Company. If Xxxxx'x employment is
terminated for cause, he shall be entitled to his Base Salary, as provided in
Section 4, through the end of the pay period in which the termination occurs.
8.4. Without Cause. Notwithstanding any other term or
provision of this Agreement, the Company may terminate Xxxxx'x employment and
this Agreement at any time and for whatever reason it deems appropriate. In the
event such termination by the Company occurs and is not due to disability
pursuant to Section 8.2 or for cause pursuant to Section 8.3, Xxxxx shall be
entitled to payment of (a) his Base Salary, as provided in Section 4, for the
greater of six (6) months from the date of termination or the remaining term of
this Agreement, and (b) any amounts due under Incentive Bonus Plans then in
effect in accordance with the terms of such plans.
8.5. Voluntary Termination. Xxxxx may voluntarily
terminate his employment with the Company on at least 60 days' prior written
notice. Upon such termination, Xxxxx shall be entitled to his Base Salary, as
provided in Section 4, through the end of the pay period in which the
termination occurs.
9. Acceleration of Stock Options. All outstanding and
unexpired stock options held by Xxxxx that are not then exercisable shall become
exercisable, in whole or in part, for a
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period of sixty (60) days following termination of employment pursuant to
Section 8.4.
10. Covenants Not to Compete.
10.1. Competition; Soliciting Customers. Xxxxx
promises and agrees that, until the later of (a) the termination of the
Agreement or (b) the expiration of any salary payments made to Xxxxx pursuant
to Section 8.4, he will not, directly or indirectly:
(i) own, manage, operate, control, be
employed by, render advisory services to, participate
in or be connected in any management or control of
any business in the United States that is engaged in
competition with Texfi or any of its subsidiaries or
affiliates in the commission dyeing and finishing of
textile products or the manufacture and/or sale of
textile products of the same or a like nature to the
products of Texfi and its subsidiaries, or
(ii) influence or attempt to influence any
customer of Texfi or any of its subsidiaries or
affiliates to divert its purchases of woven or knit
fabrics or other products to any individual,
partnership, firm, corporation or other entity then
in competition with Texfi or any of its subsidiaries
or affiliates.
For purposes of this Section 10.1, "competition with Texfi or any of its
subsidiaries or affiliates" shall mean direct competition for customers of
textile products or services in any geographic area in which Texfi or any of its
subsidiaries or affiliates is engaged, directly or indirectly, in selling or
attempting to sell such products or services.
10.2. Soliciting Employees; Interference. Xxxxx
promises and agrees that, for
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a period of one year after the later of (a) the termination of the Agreement, or
(b) the expiration of any salary payments made to Xxxxx pursuant to Section 8.4,
he will not, directly or indirectly:
(i) solicit any employee of Texfi or any
subsidiary or affiliate of Texfi, who earned annually
$25,000 or more as an employee during the last six
months of Xxxxx'x employment by Texfi, to work for
any business, individual, partnership, firm,
corporation or other entity then in competition with
the business of Texfi or any of its subsidiaries or
affiliates; or
(ii) wrongfully interfere with, disrupt or
attempt to disrupt the relationship, contractual or
otherwise, between Texfi and any other party,
including without limitation any supplier,
distributor, lessor or lessee, licensor or licensee.
10.3. Scope. Xxxxx acknowledges and agrees that the covenants
set forth in Sections 10.1 and 10.2 shall be enforceable in accordance with
their terms notwithstanding any termination of the Agreement or his employment
by Texfi, for any reason whatsoever, including without limitation, the
termination of his employment under the circumstances described in Sections 8.3,
8.4, and 8.5; and the obligations set forth in Sections 10.1 and 10.2 shall
continue as therein provided irrespective of whether payments are required by
Texfi to Xxxxx under the Agreement except that Xxxxx shall not be bound by said
covenants if Texfi fails to make any payments which, under the terms of the
Agreement, it has agreed to make to Xxxxx after the termination of his
employment.
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10.4. Savings Clause. It is the desire and intent of the
parties that the provisions of Sections 10.1 and 10.2 shall be enforced to the
fullest extent permitted under the laws and public policies of each jurisdiction
in which enforcement is sought. Accordingly, if any particular portion of
Sections 10.1 and 10.2 shall be adjudicated to be invalid or unenforceable, such
adjudication shall apply only with respect to the operation of that portion in
the particular jurisdiction in which such adjudication is made, and all other
portions shall continue in full force and effect.
11. Confidential Information; Rights to Materials.
11.1. Confidential Information. Xxxxx agrees not
to disclose, either while in Texfi's employ or at any time thereafter, to any
person not employed by Texfi, or not engaged to render services to Texfi, any
confidential and proprietary information of Texfi obtained by him while in the
employ of Texfi, including, without limitation, any of Texfi's methods,
processes, techniques, shop practices, formulae, research data, marketing and
sales information, personnel data, customer lists, financial data, plans, and
all other know-how, trade secrets and proprietary information of Texfi;
provided, however, that this provision shall not preclude Xxxxx 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 11.1
by Xxxxx), from use or disclosure of information acquired by Xxxxx outside of
his affiliation with Texfi, from disclosure required by law or court order, or
from disclosure appropriate and in the ordinary course of carrying out his
duties and authorities hereunder (e.g., disclosure to Texfi's outside
accountants, bankers or trade creditors of financial date properly request by
such persons).
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11.2. Rights to Materials. Xxxxx also agrees that, upon
termination of his employment for whatever reason, he will not take with him,
without the prior written consent of an officer authorized to act in the matter
by the Board of Directors, any records, files, memoranda, reports, price lists,
customer lists, drawings, plans, sketches, documents, specifications, and the
like (or any copies thereof) relating to the business of Texfi.
12. Assignment by Texfi. This Agreement shall be binding upon and shall
inure to the benefit of Texfi or any corporation or other entity to which Texfi
may transfer all or substantially all of its assets and business (by operation
of law or otherwise) and to which Texfi may assign this Agreement, in which case
"Texfi," as used herein, shall mean such transferee corporation or other entity.
13. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws and judicial decisions of the State of
North Carolina.
14. Entire Agreement. This Agreement contains all of the
understandings and agreements of the parties hereto with respect to the
employment of Xxxxx by the Company and supersedes all prior understandings and
agreements between the parties, whether oral or in writing.
15. Amendment; Waiver. No provision of this Agreement
may be amended, modified or waived unless such amendment, modification or
waiver is agreed to in writing and signed by Xxxxx and by an officer of the
Company duly authorized to sign by the Board of Directors of the Company. No
waiver by either party hereto of any breach by the other of any provision of
this Agreement to be performed by such other party shall be deemed a waiver of
a similar or dissimilar provision at the same time or at any prior or
subsequent time.
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16. Severability. If any one or more of the provisions
contained in this Agreement shall be invalid, illegal, or unenforceable in any
respect under applicable law, the validity, legality or enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
17. Withholding. Anything herein to the contrary
notwithstanding, all payments made by the Company hereunder shall be subject to
the withholding of such amounts relating to taxes as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation.
IN WITNESS WHEREOF, the parties hereby have executed this Agreement as
of the 1st day of January, 1997.
TEXFI INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
President
/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
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