Employment Agreement - Collins & Aikman Products Co. and Reed White
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of December 1, 2000, by and between COLLINS & AIKMAN PRODUCTS CO., a Delaware
corporation (the "Company"), and Reed White ("Employee").
W I T N E S S E T H
WHEREAS, the Company wishes to retain Employee's services by providing
Employee the compensation and benefits set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the parties agree as follows:
1. Term of Employment. The Company hereby agrees to employ Employee,
and Employee hereby accepts employment, for a period of 3 years, commencing
December 1, 2000 and ending November 30, 2003, subject to the terms and
conditions of this Agreement. At the end of such initial 3 year term, unless the
Company shall have given Employee 60 days prior written notice of its intention
to terminate this Agreement at the end of the initial term hereof, the term of
this Agreement shall automatically be extended by an additional one year period.
Thereafter, unless the Company shall have given Employee 60 days prior written
notice of its intention to terminate this Agreement at the end of the term then
in effect, the term of this Agreement shall automatically be extended by an
additional one year period.
2. Position of Employment. During the term of this Agreement, Employee
shall be employed in the position of President - Collins & Aikman Convertible
Systems and shall perform such services for the Company and its affiliates as
may be assigned to him from time to time by the Chairman or the Board of
Directors of the Company. Employee shall devote his entire business time and
attention to the affairs of the Company and the performance of his duties
hereunder and shall serve the Company diligently and to the best of his
abilities. The location of Employee's employment hereunder shall be the
Company's Convertible Systems Division Headquarters.
Nothing in this Agreement shall prohibit Employee from participating in
civic or community organizations or from making passive investments using his
personal assets so long as such participation and investments do not interfere
with the performance of Employee's duties under this Agreement. In addition,
Employee may, with the prior written approval of the Chairman or the Board of
Directors of the Company, serve as a member of the board of directors of any
business that is not a direct or indirect competitor of the Company and its
affiliates.
3. Compensation.
(a) Base Salary. The Company shall pay to Employee base salary at an
annual rate of not less than $250,000 during the term of his employment
hereunder. Such amount shall be
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reviewed annually by the Chairman and Chief Executive Officer of the Company and
may be increased in his sole discretion.
(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 no less than forty percent (40%) of Employee's base salary.
4. Benefits and Perquisites.
(a) General. Employee shall be entitled to such fringe benefits and
perquisites, and to participate in such pension, savings plan and benefit plans
as are generally made available to executives of the Company during the term
hereof, including consideration for annual stock option awards, major medical,
extended medical and disability insurance, supplemental retirement income plan,
group term life insurance and appropriate annual holidays, sick days and
vacation time.
(b) Perquisite Account. The Company shall provide an annual allowance
in the amount of $20,000 net of income taxes beginning January 1, 2001. The
allowance shall be used for the purchase/lease of an automobile and associated
insurance. Additionally, the allowance should be used to cover club membership
fees, financial planning and/or income tax preparation.
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 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)
(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");
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(c) by the Company at any time 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 at any time for any reason other than a "Constructive
Termination" (as defined below) (which shall be referred to as a
"Voluntary Termination"); or
(e) by Employee by giving notice to the Company pursuant to Paragraph
13 within 30 days after the occurrence of one or more of the following:
(i) any reduction in Employee's base salary, unless such reduction is
being made in conjunction with an across-the-board reduction in the
salaries of all senior executives of the Company in response to adverse
economic conditions, (ii) a material breach of this Agreement by the
Company, (iii) a material reduction in Employee's total compensation
and benefits package or (iv) the Company's giving notice of the
non-renewal of this Agreement at the end of the term then in effect
pursuant to Paragraph 1 hereof (which shall be referred to as a
"Constructive Termination"); provided, however, no event or
circumstance described in clause (ii) or (iii) shall give rise to a
"Constructive Termination" for purposes of this Agreement unless
Employee shall have given notice to the Company of Employee's
determination of the occurrence of an event or circumstance described
in clause (ii) or (iii) and such event or circumstance shall be
continuing as of the end of 45 days after the giving of such notice.
For purposes of Paragraph 6(c), no act or failure to act on Employee's part
shall be considered "willful" unless knowingly done or failed to be done by
Employee in bad faith and without the reasonable belief that Employee's action
or omission was in the best interest of the Company.
7. Termination Procedure.
(a) Notice of Termination. Any termination of Employee's employment by
the Company or by Employee under Paragraph 6 hereof shall be communicated by
written Notice of Termination to the other party hereto in accordance with
Paragraph 13. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice that indicates the specific termination provision in this
Agreement relied upon and sets forth in reasonable detail the facts and
circumstances providing a basis for termination of Employee's employment under
the provision so indicated.
(b) Termination Date. "Termination Date" shall mean (i) if Employee's
employment is terminated pursuant to Paragraph 6(a) or (b) above, the date on
which a Notice of Termination is given or (ii) if Employee's employment is
terminated pursuant to Paragraph 6(c), (d) or (e) above, 30 days after the date
on which a Notice of Termination is given.
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8. Benefits Upon Termination.
(a) Termination as a Result of Death, Inability, Voluntary 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 Death
Termination, an Inability Termination, a Voluntary Termination or a For Cause
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, (ii) any accrued but
unused vacation and (iii) all vested and accrued benefits earned by Employee
under any employee benefit plans and programs sponsored by the Company in which
Employee participates.
(b) 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 and provide 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 24 months, based on the rate of base
salary in effect immediately preceding the Termination Date;
(iii) an amount equal to Employee's standard annual bonus
under Paragraph 3(b); and
(iv) continued participation in the benefit plans, programs
and arrangements described in Paragraphs 4(a) and (b) during
the severance period described in Paragraph 8(b)(ii) above
(other than the annual executive physical program, long-term
disability plan and additional accruals under the supplemental
retirement income plan); provided, however, that participation
in such benefit plans, programs and arrangements shall cease
prior to the expiration of the severance period to the extent
Employee actually participates in comparable benefit plans,
programs or arrangements during such period, and Employee
shall report any such participation to the Company.
In addition, all outstanding stock options granted to Employee under
the Company's stock option plans 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 90
days after the Termination Date or the original expiration date of said options.
The Company shall also cause Employee to receive all vested and accrued benefits
earned by Employee under all employee benefit plans and programs sponsored by
the Company in which Employee participates.
(c) Method of Payment of Severance Compensation. The amount due to
Employee pursuant to Paragraph 8(b)(ii) above shall be paid on a periodic basis
in accordance with the
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Company's normal pay practice. The amount due to Employee pursuant to Paragraph
8(b)(iii) above shall be paid in a lump sum upon the expiration of the severance
period described in Paragraph 8(b)(ii).
9. Covenants of Employee.
(a) Non-disparagement. Employee shall 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, officers or products thereof or
which could adversely affect the morale of employees of the Company or its
subsidiaries.
(b) Non-Competition. Employee shall not Compete (as hereinafter
defined) with the Company or any of its subsidiaries or affiliates in any way
during the term of his employment with the Company or any of its subsidiaries or
affiliates and for the 24 month period following the Date of Termination (the
"Restricted Period") in any state in which the Company or any of its
subsidiaries or affiliates conduct business. "Compete" means to engage in any
business activity whatsoever related in any manner or fashion to any business of
the Company or any of its subsidiaries or affiliates. Without limiting the
generality of the foregoing, Employee shall not, during the Restricted Period,
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 Company or any of its subsidiaries of
affiliates; 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 Competes with
the Company.
(c) Non-Solicitation. Employee covenants and agrees that he will not,
during the Restricted Period, (i) solicit, employ or otherwise engage as an
employee, independent contractor or otherwise, any person who is or was, at any
time during the 12 month period immediately preceding Employee's Date of
Termination, an employee of the Company or any of its subsidiaries or
affiliates, (ii) induce, or facilitate in any manner, or attempt to induce, or
facilitate in any manner, any employee of the Company or any of its subsidiaries
or affiliates to terminate such employment or (iii) interfere in any manner with
the relationship of the Company or any of its subsidiaries or affiliates with
any person, including any person who, at any time during the 12 month period
immediately preceding Employee's Date of Termination, was an employee,
contractor, supplier or customer of the Company or any of its subsidiaries or
affiliates.
(d) Confidential Information. Employee understands that in the
performance of services hereunder Employee may obtain knowledge of "confidential
information" (as hereinafter defined) relating to the business of the Company
(or of any of its subsidiaries or affiliates). Employee shall not, without the
prior written consent of the Chairman or the Board of Directors of the Company,
either during Employee's employment by the Company or thereafter, (i) use or
disclose any such confidential information outside the Company (or any of its
subsidiary or affiliated companies) except in the performance of his duties
hereunder and as otherwise required
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by law, (ii) publish any article with respect thereto, (iii) except in the
performance of services hereunder, remove from the premises of the Company, or
aid in such removal, any such confidential information or any property or
material related thereto or (iv) sell, exchange or give away or otherwise
dispose of any such confidential information now or hereafter owned by the
Company whether or not the same shall or may have been originated, discovered or
developed by Employee. It is understood that for purposes of this Agreement the
term "confidential information" shall be construed broadly to include all
information or compilations of information which (i) is, or designed to be, used
in the business of the Company (or any of its subsidiaries or affiliates) or
results from its (or their) research or development activities, (ii) is private
or confidential in that it is not generally known or available to the public and
(iii) gives the Company (or any of its subsidiaries or affiliates) an
opportunity to obtain an advantage over competitors who do not know or use it.
(e) Return of Materials. Upon the termination of Employee's employment,
Employee shall return to the Company all property of the Company in or under
Employee's possession or control, including without limitation all tangible
"confidential information" described in Paragraph 9(d) above. Such return shall
be made at such place in Troy, Michigan as the Company shall specify and shall
be made within 5 days after Employee's Date of Termination.
(f) Cooperation. During Employee's employment by the Company and
thereafter, Employee shall promptly notify the Company of any threatened,
pending or completed investigation, claim, action, suit or proceeding, whether
civil, criminal, administrative or investigative ("Proceeding"), in which he may
be involved, whether as an actual or potential party or witness or otherwise, or
with respect to which he may receive requests for information, by reason of his
future, present or past association with the Company or any of its subsidiaries
or affiliates. Employee shall cooperate fully with the Company and its
subsidiaries and affiliates in connection with any Proceeding at no expense to
the Company or any of its subsidiaries or affiliates other than the
reimbursement of Employee's reasonable out-of-pocket expenses. Employee shall
not disclose any confidential or privileged information in connection with any
Proceeding without the consent of the Company and shall give prompt notice to
the Company of any request therefor.
(g) Acknowledgement Regarding Covenants. Executive acknowledges and
agrees that the promises and restrictive covenants set forth in this Paragraph 9
are reasonable and necessary to protect the interest of the Company and
reasonably limited in time, scope and territory. Executive acknowledges that,
given his former position and the information he possesses regarding the Company
and its operations, the business of the Company would be substantially and
materially damaged in the event of any violation of the promises and covenants
herein contained, and the Company shall be entitled (in addition to any other
remedy that may be available to it) to (i) a decree or order for specific
performance of any such promise or covenant and (ii) an injunction restraining
the violation or threatened violation of any such promise or covenant. The
covenants of Employee contain in this Paragraph 9 shall survive the expiration
of this Agreement or the termination of this Agreement by either party.
10. Release. In consideration of the compensation continuance available
in certain events pursuant to this Agreement, Employee unconditionally releases
and covenants not to sue
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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, civil
rights, or termination contrary to public policy, and Employee shall be required
to provide written confirmation of such release, in a form satisfactory to the
Company, upon his Date of Termination as a condition precedent to the Company's
obligation to provide any severance benefits under Paragraph 8.
11. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by the laws of Michigan, regardless of the laws that
might be applied under applicable principles of conflicts of laws.
12. Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties hereto with respect to the matters
referred to herein and supersedes all prior agreements and understandings
between the parties hereto with respect to the matters referred to herein.
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.
5755 New King Court
Troy, Michigan 48098
Attention: Mr. Gregory Tinnell
Senior Vice President -
Human Resources
To Employee: Mr. Reed White
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. If any
provision of this Agreement is held to be excessively broad as to time,
duration, geographic scope, activity or subject, it shall be construed by
limiting and reducing it so as to be enforceable to the fullest extent
compatible with applicable 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. 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, 7 and 8 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/ Reed White
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Reed White
COLLINS & AIKMAN PRODUCTS CO.
By: /s/ Thomas E. Evans
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Thomas E. Evans, Chairman and
Chief Executive Officer
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