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 Xxxxxx X. Xxxxxxxxx, ("Xxxxxxxxx").
W I T N E S S E T H:
WHEREAS, Texfi desires to employ Xxxxxxxxx and to enter
into the Agreement embodying the terms of such employment; and
WHEREAS, Xxxxxxxxx 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 Xxxxxxxxx and
Xxxxxxxxx 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, Xxxxxxxxx shall serve as President of the Texfi Blends 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, Xxxxxxxxx shall devote his full time and attention to the
business and affairs of Texfi; provided, however, that nothing in this Agreement
shall preclude Xxxxxxxxx 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, Xxxxxxxxx
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 Xxxxxxxxx may agree to from time to time..
5. Bonus. Xxxxxxxxx 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. Xxxxxxxxx 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, Xxxxxxxxx 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 Xxxxxxxxx properly accounts therefor.
7.2. Automobile. During the term of his employment
hereunder, Texfi will furnish to Xxxxxxxxx an automobile to be used in
performing his duties on behalf of Texfi, or will pay to Xxxxxxxxx an automobile
allowance of $500 per month.
. 8. Termination of Employment.
8.1. Death. In the event of the death of Xxxxxxxxx
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
Xxxxxxxxx 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,
Xxxxxxxxx, 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 Xxxxxxxxx and this Agreement for "cause." For
purposes of this Agreement,
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"cause" shall mean: (i) Xxxxxxxxx'x willful and continued failure to perform
substantially his duties 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 Xxxxxxxxx has not substantially performed his duties; (ii) theft or
misappropriation by Xxxxxxxxx of assets of the Company; or (iii) actions by
Xxxxxxxxx which constitute an act of moral turpitude or that materially injure
the Company. If Xxxxxxxxx'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 Xxxxxxxxx'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, Xxxxxxxxx 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. Xxxxxxxxx may
voluntarily terminate his employment with the Company on at least 60 days'
prior written notice. Upon such termination, Xxxxxxxxx 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
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held by Xxxxxxxxx that are not then exercisable shall become exercisable, in
whole or in part, for a period of sixty (60) days following termination of
employment pursuant to Section 8.4.
10. Covenants Not to Compete.
10.1. Competition; Soliciting Customers.
Xxxxxxxxx promises and agrees that,
until the later of (a) the termination of the Agreement or (b) the expiration
of any salary payments made to Xxxxxxxxx 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.
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10.2. Soliciting Employees; Interference.
Xxxxxxxxx promises and agrees that, for 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 Xxxxxxxxx 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 Xxxxxxxxx'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. Xxxxxxxxx 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 Xxxxxxxxx under the Agreement except that Xxxxxxxxx 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
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make to Xxxxxxxxx after the termination of his employment.
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. Xxxxxxxxx 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 Xxxxxxxxx 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
Xxxxxxxxx), from use or disclosure of information acquired by Xxxxxxxxx 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
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(e.g., disclosure to Texfi's outside accountants, bankers or trade creditors of
financial date properly request by such persons).
11.2. Rights to Materials. Xxxxxxxxx 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 Xxxxxxxxx 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 Xxxxxxxxx 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
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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.
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/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
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