Employment Agreement - Collins & Aikman Products Co. and Michael Weston
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is made
and entered into as of January 20, 1999, by and between COLLINS & AIKMAN
PRODUCTS CO., a Delaware corporation (the "Company"), and MICHAEL WESTON
("Employee").
W I T N E S S E T H
WHEREAS, Employee is currently employed by the Company pursuant to that
certain Employment Agreement between the Company and Employee dated March 3,
1997 (the "Employment Agreement"); and
WHEREAS, the Company and Employee desire to amend and restate the
Employment Agreement in its entirety effective as of the date hereof;
NOW, THEREFORE, in consideration of Employee's continued employment and the
mutual agreements contained herein, the parties agree that the Employment
Agreement is amended and restated in its entirety effective as of the date
hereof to read as follows:
1. Term of Employment. The Company hereby agrees to employ Employee, and
Employee hereby accepts employment, for a period of two (2) years, commencing
April 1, 1999 and ending March 31, 2001, subject to the terms and conditions of
this Agreement.
2. Position of Employment. During the term of this Agreement, Employee
shall be employed in the position of President - Collins & Aikman European
Interior Systems Group and shall perform such services for the Company and its
subsidiaries as may be assigned to him from time to time by the Board of
Directors of the Company. The initial location of Employee's employment
hereunder has not been finalized as of the date hereof but is anticipated to be
in Germany. Employee shall devote his full time and attention to the affairs of
the Company and his duties in such position.
3. Compensation.
(a) Base Salary. The Company shall pay to Employee base salary at an annual
rate of not less than $330,000 during the term of his employment hereunder. Such
amount shall be reviewed annually by the Board of Directors of the Company or an
appropriate committee thereof (the Company's Board of Directors or such
committee being referred to herein as the "Compensation Board") and may be
increased in the sole discretion of the Compensation Board.
(b) Bonus Plans. During the term of Employee's employment hereunder,
Employee shall be eligible to participate in the Company's annual Executive
Incentive Compensation Plan (the "EIC Plan") in accordance with the applicable
provisions of the EIC Plan. The standard bonus for Employee under the EIC Plan
shall be fifty percent (50%) of Employee's base salary.
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However, in no event shall Employee receive a cash bonus of less than $165,000
for Employee's participation in the EIC Plan during 1999.
(c) Stock Options. Employee shall be eligible to participate in the Collins
& Aikman Corporation 1994 Employee Stock Option Plan (the "Option Plan") and
shall be granted the option to purchase up to 100,000 shares of the Common Stock
of Collins & Aikman Corporation, in accordance with the applicable terms and
conditions of the Option Plan and an Option Agreement between Collins & Aikman
Corporation and Employee to be entered into, dated and effective as of the date
of this Agreement. The option price for all such shares shall be the closing
price of Collins & Aikman Corporation shares on the New York Stock Exchange as
of the date hereof. Subject to the terms and conditions of the Option Plan and
the Option Agreement, the option of Employee to purchase up to the 100,000
shares shall vest as follows:
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Total Number of
Vesting Date Shares Vested Percentage Vested
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One year from date of grant 50,000 50%
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Two years from date of grant 100,000 100%
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4. Benefits and Perquisites.
(a) General. Employee shall be entitled to such fringe benefits and
perquisites, and to participate in such pension, profit sharing and benefit
plans as are generally made available to executives of the Company during the
term hereof, including major medical, extended medical and disability insurance,
supplemental retirement income plan, group term life insurance and appropriate
annual holidays, sick days and vacation time of four weeks per year.
(b) Company Automobile. The Company shall furnish to Employee the use of an
automobile that is comparable to automobiles furnished to other executives of
Employee's level based in Europe, as mutually agreed upon by Employee and the
President and Chief Executive Officer of the Company, and shall reimburse
Employee for normal gasoline and maintenance charges, subject to proper
allocation of personal use for income tax purposes.
(c) Club Dues and Initiation Fee. The Company shall pay the monthly dues
and a reasonable initiation fee for membership at a country club in Europe of
Employee's choice, provided such club has been approved by the President and
Chief Executive Officer of the Company. The Company shall not be liable for any
other charges, fees or assessments payable by Employee to such club. Until
Employee joins a club in Europe for which approval has been granted, the Company
shall continue pay the monthly dues of the country club of which Employee is
currently a member, but shall not be liable for any other charges, fees or
assessments payable by Employee to such club.
(d) Expatriate Policy Benefits. During the term of Employee's employment
hereunder, Employee shall receive benefits in accordance with the Company's
standard expatriate policy, which has previously been disclosed and explained to
Employee.
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5. Reimbursement of Expenses. The Company shall reimburse Employee for all
reasonable travel, entertainment and other reasonable business expenses
reasonably incurred by Employee in connection with the performance of his duties
hereunder, provided that Employee furnishes to the Company adequate records or
other evidence respecting such expenditures.
6. Termination of Employment. Employee's employment under this Agreement
may be terminated:
(a) by the Company upon Employee's death (which shall be referred to
as a "Death Termination") or Inability (as defined below) (which shall be
referred to as an "Inability Termination");
(b) by the Company for Cause, which means (i) fraud or
misappropriation with respect to the business of the Company or intentional
material damage to the property or business of the Company, (ii) willful
failure by Employee to perform his duties and responsibilities and to carry
out his authority, (iii) willful malfeasance or misfeasance or breach of
fiduciary duty or representation to the Company or its stockholders, (iv)
willful failure to act in accordance with any specific lawful instructions
of a majority of the Board of Directors of the Company, or (v) conviction
of Employee of a felony (which shall be referred to as a "For Cause
Termination");
(c) by the Company for any reason other than a For Cause Termination,
Death Termination or Inability Termination (which shall be referred to as a
"No Cause Termination");
(d) by Employee for any reason other than a "Constructive Termination"
(as defined below) at any time (which shall be referred to as a "Voluntary
Termination"); or
(e) by Employee upon the occurrence of one or more of the following:
(i) a material reduction in Employee's total compensation and benefits
package, or (ii) an adverse change (in the judgment of Employee) in
Employee's responsibilities, position (including status, office, title,
reporting relationships or working conditions), authority or duties (which
shall be referred to as a "Constructive Termination").
"Inability" means Employee's physical or mental disability for any consecutive
six-month period (measured from the first date on which Employee is absent from
work due to such disability to the same date in the sixth succeeding calendar
month, or, if there is no such date or such date is not a business day, the next
succeeding business day).
7. Benefits Upon Termination.
(a) Termination as a Result of Death Termination or Inability Termination.
If Employee's employment under this Agreement is terminated prior to the
expiration of the term of this Agreement as a result of a Death Termination or
an Inability Termination, the Company shall pay Employee or, if applicable,
Employee's estate or legal representative, (i) Employee's unpaid base salary
under Paragraph 3(a) accrued to the date on which his employment terminates
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(the "Termination Date") and (ii) twelve (12) months of Employee's base salary
based on the rate of base salary in effect immediately preceding the Termination
Date.
(b) Termination as a Result of Voluntary Termination or For Cause
Termination. If Employee's employment under this Agreement is terminated prior
to the expiration of the term of this Agreement as a result of a Voluntary
Termination or a For Cause Termination, the Company shall pay Employee (i) his
unpaid base salary under Paragraph 3(a) accrued to the Termination Date, (ii)
any accrued but unused vacation and (iii) all benefits earned by Employee under
any employee benefit plans and programs sponsored by the Company in which
Employee participates.
(c) Termination as a Result of No Cause Termination or Constructive
Termination. If Employee's employment under this Agreement is terminated prior
to the expiration of the term of this Agreement as a result of a No Cause
Termination or a Constructive Termination, the Company shall pay to Employee the
following benefits:
(i) Employee's unpaid base salary accrued to the Termination Date and
any accrued but unused vacation;
(ii) base salary for the greater of (A) twelve (12) months or (B) the
remaining term of this Agreement, based on the rate of base salary in
effect immediately preceding the Termination Date; and
(iii) reimbursement of all reasonable expenses incurred by Employee in
relocating to the United States.
In addition, all outstanding stock options granted to Employee under the
Option Plan will immediately vest upon a No Cause Termination or a Constructive
Termination prior to the expiration of the term of this Agreement and will
continue to be fully exercisable until the earlier of ninety (90) days after the
Termination Date or the original expiration date of said options. The Company
shall also cause Employee to receive all benefits earned by Employee under all
employee benefit plans and programs sponsored by the Company in which Employee
participates.
The amount due to Employee pursuant to 7(a)(ii) or 7(c)(iii) above shall be
paid, at the sole discretion of the Compensation Board at the Termination Date,
either in a lump sum or on a periodic basis in accordance with the Company's
normal pay practice.
8. Representations and Covenants of Employee.
(a) Conduct. Employee will at all times refrain from taking any action or
making any statements, written or oral, which are intended to and do disparage
the goodwill or reputation of the Company or any of its subsidiaries or
affiliates or any directors or officers thereof or which could adversely affect
the morale of employees of the Company or its subsidiaries.
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(b) Performance of Duties. In consideration of the payments to be made
hereunder, Employee agrees that during the term of his employment under this
Agreement, he shall devote his entire business time and attention to the
performance of his duties hereunder, serve the Company diligently and to the
best of his abilities. Employee further agrees not compete with the Company or
its subsidiaries in any way whatsoever within Europe or the United States during
the term of employment under this Agreement and after the Termination Date
during the period of base salary continuation under Paragraph 7(c)(ii)
(irrespective of whether such base salary continuation is paid in a lump sum or
on a periodic basis). Without limiting the generality of the foregoing, Employee
shall not, during any such applicable period of time, directly or indirectly
(whether for compensation or otherwise), alone or as an agent, principal,
partner, officer, employee, trustee, director, shareholder or in any other
capacity, own, manage, operate, join, control or participate in the ownership,
management, operation or control of, or furnish any capital to, or be connected
in any manner with or provide any services as a consultant for any business
which competes with the business of the Company, its parent company or their
subsidiaries or affiliates as it may be conducted from time to time; provided,
however, that notwithstanding the foregoing, nothing contained in the Agreement
shall be deemed to preclude Employee from owning not more than 5% of the
publicly traded securities of any entity which is in competition with the
business of the Company, its parent company or their subsidiaries or affiliates.
(c) Company Information. Employee agrees that so long as he is employed by
the Company and following any termination of his employment Employee will keep
confidential all confidential information and trade secrets of the Company and
any of its subsidiaries or affiliates and will not disclose such information to
any person without the prior approval of the Board of Directors of the Company
or use such information for any purpose other than in the course of fulfilling
his duties of employment with the Company pursuant to this Agreement. It is
understood that for purposes of this Agreement the term "confidential
information" is to be construed broadly to include all material nonpublic or
proprietary information.
9. Continued Employment at End of Term. It is the Company's intention to
find a key role for Employee in the United States at the end of the two (2) year
term of this Agreement. However, if at the end of such two (2) year term the
Company does not offer Employee a comparable position in the United States,
Employee shall be entitled to the following benefits:
(i) twelve (12) months of base salary based on the rate of base salary
in effect immediately preceding the Termination Date;
(ii) one (1) year's standard bonus for Employee under the EIC Plan;
(iii) reimbursement of all reasonable expenses incurred by Employee in
relocating to the United States; and
(iv) an extension of the period to exercise all vested stock options
granted under the Option Plan until the earlier of (A) the second
anniversary of the Termination Date or (B) the original expiration date of
said options.
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10. Release. In consideration of the compensation continuance available in
certain events pursuant to this Agreement, Employee unconditionally releases and
covenants not to sue the Company and its subsidiaries and affiliates and
directors, officers, employees and stockholders thereof, from any and all
claims, liabilities and obligations of any nature pertaining to termination of
employment other than those explicitly provided for by this Agreement including,
without limitation, any claims arising out of alleged legal restrictions on the
Company's rights to terminate its employees, such as any implied contract of
employment or termination contrary to public policy.
11. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by the laws of North Carolina, regardless of the
laws that might be applied under applicable principles of conflicts of laws.
12. Entire Agreement and Survivorship. This Agreement and that certain
Change in Control Agreement between Employee and Collins & Aikman Corporation
dated March 17, 1998 constitute the entire agreement and understanding between
the parties hereto with respect to the matters referred to herein and therein
and supersede all prior agreements and understandings between the parties hereto
with respect to the matters referred to herein and therein. The representations,
warranties and covenants of Employee contained in all parts of Paragraph 8, and
the release contained in Paragraph 10 shall survive expiration, or termination
of this Agreement by either party.
13. Notice. Any written notice required to be given by one party to the
other party hereunder shall be deemed effective if mailed by certified or
registered mail:
To the Company: Collins & Aikman Products Co.
701 McCullough Drive
Charlotte, North Carolina 26262
Attention: Harold R. Sunday
To Employee: Michael Weston
620 Hazelwood
Birmingham, Michigan 48009
or such other address as may be stated in notice given under this Paragraph 13.
14. Severability. The invalidity, illegality or enforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity,
legality or enforceability of the remainder of this Agreement in such
jurisdiction or the validity, legality or enforceability of this Agreement or
such provision in any other jurisdiction, it being the intent of the parties
hereto that all rights and obligations of the parties hereto under this
Agreement shall be enforceable to the fullest extent permitted by law.
15. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their personal representatives, and, in
the case of the Company, its successors and assigns, and Paragraph 10 shall also
inure to the benefit of the other persons
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and entities identified therein; provided, however, that Employee shall not,
without the prior written consent of the Company, transfer, assign, convey,
pledge or encumber this Agreement or any interest under this Agreement. Employee
understands that the assignment of this Agreement or any benefits hereof or
obligations hereunder by the Company to any of its subsidiaries or affiliates or
to any purchaser of all or a substantial portion of the assets of the Company or
of any affiliated company then employing Employee, and the employment of
Employee by such subsidiary or affiliate or by any such purchaser or by any
successor of the Company in a merger or consolidation, shall not be deemed a
termination of Employee's employment for purposes of Paragraphs 6 and 7 or
otherwise.
16. Amendment. This Agreement may be amended or canceled only by an
instrument in writing duly executed and delivered by each party to this
Agreement.
17. Headings. Headings contained in this Agreement are for or convenience
only and shall not limit this Agreement or affect the interpretation thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
/s/ D. Michael Weston
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Michael Weston
COLLINS & AIKMAN PRODUCTS CO.
By: /s/ Thomas E. Hannah
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Thomas E. Hannah
President and Chief Executive Officer