EXHIBIT 10.2
EMPLOYMENT
AGREEMENT
In the context of the proposed
merger of Safety Components International, Inc. and International
Textile Group, Inc. evidenced by a merger agreement dated
August 20, 2006 (“Merger Agreement”), the parties
hereto agree to enter into this Employment Agreement. This
Agreement is subject to the condition of the conclusion and
approval of the Merger Agreement and shall become effective
(“Effective Date”) as of the Closing Date, as such term
“Closing Date” is to be construed as defined in the
Merger Agreement.
THIS EMPLOYMENT
AGREEMENT (“Agreement”) is entered into as of
the Effective Date by and between Stephen B. Duerk
(“Executive”) and International Textile Group, Inc.
(“Company” or “ITG”), a Delaware
corporation.
R E C I T A L S:
A. Executive serves as the President
– Safety Textiles International division of ITG and is a key
executive of ITG and is expected to make major contributions to the
profitability, growth and financial strength of the ITG.
B. ITG desires to employ Executive,
and Executive desires to accept such employment, under the terms
and conditions of this Agreement.
C. The Board of Directors has also
determined that it is in the best interests of the stockholders and
ITG to promote stability among key executive.
IN CONSIDERATION OF THE FOREGOING,
the mutual covenants contained herein, and other good and valuable
consideration, receipt of which is hereby acknowledged, the parties
agree as follows:
1. Definitions.
1.1 “ Base Salary ” has the
meaning set forth in Section 6.1.
1.2 “ Board ” means the board of
directors of ITG.
1.3 “ Cause ” means, in the
Company’s judgment, (A) the commission by Executive of
(i) a felony or (ii) any serious crime involving fraud,
dishonesty or breach of trust; (B) gross negligence or
intentional misconduct by Executive with respect to ITG or in the
performance of his duties to ITG; (C) failure to follow a
reasonable and lawful direction of the President and CEO of ITG;
(D) failure by Executive to cooperate in any corporate
investigation, (E) breach by Executive of any material
provision of this Agreement, which breach, if curable, is not cured
by Executive within ten (10) calendar days after receipt by
Executive of written notice from ITG of such breach, or
(F) failure to follow Company policy or procedures. For
purposes of this definition, no act or failure to act by the
Executive shall be considered “intentional” unless done
or omitted to be done by the Executive in bad faith and without
reasonable belief that the Executive’s action or omission was
in the best interests of ITG.
1.4 “ Disability ” or “
Disabled ” means the absence of Executive from
Executive’s duties with the Company on a full time basis for
180 consecutive days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and reasonably
acceptable to Executive or Executive’s legal
representative.
1.5 “ Employee Benefits ” means
the “benefit plans and policies” for the limited
liability companies of ITG or its predecessor that was the employer
of the Executive immediately prior to the execution of this
Employment Agreement and Employee Benefits shall refer to such
plans until adopted by and as subsequently amended by
ITG.
1.6 “ Good Reason ” means the
termination of Executive’s employment by Executive for any of
the following reasons:
(A) involuntary reduction in
Executive’s Base Salary unless such reduction occurs
simultaneously with a reduction in officers’ salaries
generally applicable on a company-wide basis;
(B) involuntary discontinuance or
reduction in bonus award opportunities for Executive under
ITG’s Incentive or Bonus Plan unless a generally applicable
company-wide reduction or elimination of all officers’ bonus
awards occurs simultaneously with such discontinuance or
reduction;
(C) involuntary discontinuance of
Executive’s participation in any employee benefit plans
maintained by ITG unless such plans are discontinued by reason of
law or loss of tax deductibility to ITG with respect to
contributions to such plans, or are discontinued as a matter of ITG
policy applied equally to all participants in such plans that are
in the same classification of employees as Executive;
(D) failure to obtain an assumption
of ITG’s obligations under this Agreement by any successor to
ITG, regardless of whether such entity becomes a successor to ITG
as a result of a merger, consolidation, sale of assets of ITG, or
other form of reorganization, except when the rights and
obligations of ITG under this Agreement are vested in the successor
to ITG by operation of law;
(E) involuntary relocation of
Executive’s primary office to a location more than fifty
(50) miles from the City of Greenville, State of South
Carolina, without Executive’s consent; and
(F) material reduction of
Executive’s duties in effect on the Effective Date; provided,
however that a change in title or reporting line will not
constitute Good Reason unless such change is coupled with a
material reduction in the actual duties of Executive.
1.7 “ Incentive or Bonus Plan ”
has the meaning set forth in Section 6.2 hereof.
1.8 “ ITG ” means International
Textile Group Inc. and each of the affiliates of International
Textile Group Inc. (meaning any entity that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or
is under common control with, International Textile Group Inc.),
along with all successors and assigns of each of such
entities.
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1.9 “ Plan ” has the meaning set
forth in Section 7.3.
1.10 “ Restricted Customers ”
means all the specific customer accounts, whether within or outside
of the Restricted Territory, with which Executive had any contact
or for which Executive had any responsibility (either direct or
supervisory) at the time of termination of Executive’s
employment and at any time during the two (2)-year period prior to
such termination.
1.11 “ Restricted Industry ” means
the specific industry segment or segments for which the Executive
had any responsibility (either direct or supervisory) at the time
of termination of Executive’s employment and at any time
during the two (2)-year period prior to such
termination.
1.12 “ Restricted Territory ”
means the geographic area(s) within a 200 mile radius of any and
all ITG location(s) in, to, or for which Executive worked, to which
Executive was assigned or had any responsibility (either direct or
supervisory) at the time of termination of Executive’s
employment and at any time during the two-year period prior to such
termination.
1.13 “Target
Bonus” has the
meaning set forth in the Incentive or Bonus Plan as defined in
Section 6.2 hereof.
1.14 “ Term ” has the meaning set
forth in Section 5.
1.15 “ Termination Date ” means
the date on which the termination of Executive’s employment
with ITG becomes effective.
2. Termination of Prior
Agreements.
The parties hereto acknowledge and
agree that, effective as of the date hereof, all prior employment
agreements if any are terminated and each and every provision of
each of such agreements is rendered void and of no further force or
effect whatsoever.
3. Employment.
ITG hereby employs Executive, and
Executive hereby accepts employment, according to the terms and
conditions set forth in this Agreement and for the period specified
in Section 5 of this Agreement.
4. Duties.
During the Term, Executive shall
serve ITG as its President – Safety Textiles International
division in accordance with reasonable and lawful directions from
ITG’s President and CEO and the Board of Directors and in
accordance with ITG’s Articles of Incorporation and Bylaws,
as both may be amended from time to time. Executive will report
directly to the President and Chief Executive Officer of ITG. While
Executive is employed by ITG as a
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full-time employee, Executive shall serve ITG,
faithfully, diligently, competently and to the best of his ability,
and will exclusively devote his full time, energy and attention to
the business of ITG and to the promotion of its interests.
Executive shall not, without the written consent of the President
and CEO of ITG, either render services to or for any person, firm,
corporation or other entity or organization in exchange for
compensation, regardless of the form in which such compensation is
paid and whether or not it is paid directly or indirectly to
Executive, or serve as a board member, director or trustee of any
corporation or organization regardless of whether Executive is paid
for such services. Nothing in this Section 4 shall preclude
Executive from managing his personal investments and affairs,
provided that such activities in no way interfere with the proper
performance of his duties and responsibilities as President
–Safety Textiles International division.
5. Term of
Employment.
Subject to Article 9, the term of
this Agreement (the “Term”) shall commence on the
Effective Date and end on January 31, 2008.
6. Compensation.
6.1 Base Salary
. While employed under this
Agreement, Executive will receive as his compensation for the
performance of his duties and obligations to ITG under this
Agreement a Base Salary of Three Hundred Thousand Dollars
($300,000.00) per year, which will be payable in such installments
established by ITG for all salaried employees, and which will be
subject to annual review by the Board of Directors or any committee
designated by the Board of Directors (the base salary, as it may be
modified from time to time, is referred to herein as the
“Base Salary”).
6.2 Bonus . In addition to the Base Salary, Executive will
receive with respect to the 2007 plan year a bonus in accordance
with ITG’s Incentive and Bonus Plan, a copy of which will
delivered to Executive. Unless terminated prior to the end of the
Term, Executive will receive a bonus payment no less than
$150,000.00. In the event of a termination prior to the end of the
Term of this agreement, the provisions of Section 9 of this
agreement will apply.
6.3 Withholding
. All compensation payable to
Executive pursuant to this Section 6 shall be paid net of
amounts withheld for federal, state, municipal or local income
taxes, Executive’s share, if any, of any payroll taxes and
such other federal, state, municipal or local taxes as may be
applicable to amounts paid by an employer to its employee or to the
employer/employee relationship.
7. Other Benefits of
Employment.
7.1 Employee Benefits
. Executive will be entitled to
participate in such hospitalization, life insurance, long and short
term disability, 401(k) and other employee benefit plans and
programs, if any, as may be adopted by ITG from time to time, in
accordance with the provisions of such plans and programs and on
the same basis as other full-time salaried employees of ITG who
participate in such employee benefit plans (except to the extent
that the benefits provide
