<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
Form 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 28, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to _________________
Commission file number 33-70442
DAN RIVER INC.
(Exact name of registrant as specified in its charter)
GEORGIA 58-1854637
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2291 Memorial Drive 24541
Danville, Virginia (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (804) 799-7000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No
Number of shares of common stock outstanding as of September 28, 1996:
Class A: 726,454 Shares
Class B: 82,413 Shares
There are 40 pages in the sequentially numbered, manually signed original of
this report.
Exhibit Index is on page 13.
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<PAGE>
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
See Following Pages.
<PAGE>
<PAGE> 3
DAN RIVER INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 30, September 28,
1995 1996
------------ ------------
<S> <C> <C>
(Dollars in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 1,540 $ 1,941
Accounts receivable, net 54,848 52,060
Inventories 96,204 87,606
Prepaid expenses and other current assets 2,481 1,946
Deferred income taxes 7,231 7,423
------------ ------------
Total current assets 162,304 150,976
Property, plant and equipment 241,291 265,268
Less accumulated depreciation and amortization (79,311) (94,673)
------------ ------------
Net property, plant and equipment 161,980 170,595
Other assets 6,660 5,457
------------ ------------
$ 330,944 $ 327,028
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 5,138 $ 6,557
Accounts payable 23,776 22,199
Accrued compensation and related benefits 14,857 13,986
Other accrued expenses 8,770 10,223
------------ ------------
Total current liabilities 52,541 52,965
Other liabilities:
Long-term debt 174,565 167,146
Deferred income taxes 16,795 17,398
Other deferred items 6,341 6,604
------------ ------------
Total other liabilities 197,701 191,148
Common stock subject to put rights 7,000 7,338
Shareholders' equity:
Common stock, Class A, $.01 par value; 1,500,000
shares authorized; 726,454 shares issued and
outstanding 7 7
Common stock, Class B, $.01 par value; 1,500,000
shares authorized; 82,413 shares issued and
outstanding 1 1
Additional paid-in capital 67,527 67,189
Retained earnings 8,012 10,225
Pension liability adjustment (1,845) (1,845)
------------ ------------
Total shareholders' equity 73,702 75,577
------------ ------------
$ 330,944 $ 327,028
============ ============
</TABLE>
See accompanying notes.<PAGE>
<PAGE> 4
DAN RIVER INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------- ----------------------
Sept. 30, Sept. 28, Sept. 30, Sept. 28,
1995 1996 1995 1996
--------- -------- -------- --------
<S> <C> <C> <C> <C>
(Dollars in thousands)
Net sales $ 88,155 $ 95,090 $ 283,238 $ 272,031
Costs and expenses:
Cost of sales 70,068 75,901 224,817 220,975
Selling, general
and administrative
expenses 11,211 10,910 33,668 33,866
--------- --------- --------- ---------
Operating income 6,876 8,279 24,753 17,190
Other income 7 52 68 429
Interest expense (5,643) (4,517) (17,150) (13,959)
--------- --------- --------- ---------
Income before
income taxes 1,240 3,814 7,671 3,660
Provision for
income taxes 796 1,509 4,183 1,447
--------- --------- --------- ---------
Net income $ 444 $ 2,305 $ 3,488 $ 2,213
========= ========= ========= =========
</TABLE>
See accompanying notes.
<PAGE>
<PAGE> 5
DAN RIVER INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
---------------------------
Sept. 30, Sept. 28,
1995 1996
------------ ------------
<S> <C> <C>
(Dollars in thousands)
Cash flows from operating activities:
Net income $ 3,488 $ 2,213
Adjustments to reconcile net income to
net cash provided by operating activities:
Noncash interest expense 3,811 890
Depreciation and amortization 15,154 15,658
(Gain) loss on writedown/disposal
of equipment (6) 139
Changes in operating assets and liabilities:
Accounts receivable 4,838 2,788
Inventories (17,773) 7,259
Prepaid expenses and other assets 587 (279)
Accounts payable and accrued expenses (220) (1,512)
Deferred income taxes and other
liabilities (155) 674
---------- -----------
Net cash provided by operating
activities 9,724 27,830
Cash flows from investing activities:
Total capital expenditures (21,043) (24,419)
Plant and equipment acquired in
exchange for debt 6,261 4,236
Accrued equipment purchases (4,866) (1,089)
---------- -----------
Capital expenditures in cash (19,648) (21,272)
Proceeds from sale of discontinued product
line -- 2,801
Proceeds from sale of assets 10 1,347
---------- -----------
Net cash used by investing activities (19,638) (17,124)
Cash flows from financing activities:
Net proceeds from issuance of long-term debt -- 25,313
Payments of long-term debt (6,713) (16,818)
Net borrowings (payments) - working capital
facility 16,500 (18,800)
---------- -----------
Net cash provided (used) by financing
activities 9,787 (10,305)
---------- -----------
Net increase (decrease) in cash and cash equivalents (127) 401
Cash and cash equivalents at beginning of period 1,749 1,540
---------- -----------
Cash and cash equivalents at end of period $ 1,622 $ 1,941
========== ===========
</TABLE>
See accompanying notes.<PAGE>
<PAGE> 6
DAN RIVER INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
On December 29, 1995, Braelan Corp. (Braelan), Dan River Inc.'s parent and
sole shareholder, was merged with and into Dan River Inc. The condensed
consolidated balance sheets as of December 30, 1995 and September 28,
1996, and the condensed consolidated statements of income and cash flows
for the interim periods ended September 28, 1996, represent the
consolidated financial position, results of operations and cash flows of
Dan River Inc. and its wholly-owned subsidiary, Dan River Factory Stores,
Inc. The condensed consolidated statements of income and cash flows for
the interim periods ended September 30, 1995 represent the consolidated
results of operations and cash flows of Braelan and its subsidiaries.
Braelan and its subsidiaries, and Dan River Inc. and its subsidiary are
collectively referred to as the Company.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation of
results for the interim periods presented have been included. Interim
results are not necessarily indicative of results for a full year. For
further information, refer to the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 30, 1995.
2. Inventories
The components of inventory are as follows:
<TABLE>
<CAPTION>
December 30, September 28,
1995 1996
------------ ------------
(Dollars in thousands)
<S> <C> <C>
Finished goods $ 34,463 $ 33,554
Work in process 51,452 43,451
Raw materials 3,483 3,772
Supplies 6,806 6,829
-------- --------
Total Inventories $ 96,204 $ 87,606
======== ========
</TABLE>
<PAGE>
<PAGE> 7
DAN RIVER INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. Shareholders' Equity
Activity in Shareholders' Equity is as follows:
<TABLE>
<CAPTION>
Total
Additional Pension Share-
Common Stock Paid-In Retained Liability holders'
Class A Class B Capital Earnings Adjustment Equity
------- -------- ---------- -------- ---------- -------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance at Decem-
ber 30, 1995 $ 7 $ 1 $67,527 $ 8,012 $ (1,845) $73,702
Change in common
stock subject to
put rights -- -- (338) -- -- (338)
Net income -- -- -- 2,213 -- 2,213
------ ------ ------- ------- -------- ------
Balance at Septem-
ber 28, 1996 $ 7 $ 1 $67,189 $10,225 $ (1,845) $75,577
======= ======= ======= ======= ========= =======
</TABLE>
4. Income taxes
At December 30, 1995, the Company had net operating loss carryforwards of
$1,600,000, which expire in 2005. In addition, the Company had available
a minimum tax credit carryforward of $6,700,000, investment credit
carryforwards of $3,800,000 and other general business credit
carryforwards of $1,500,000. If not used, substantially all of the
investment credit and other general business credit carryforwards will
expire in the years 1996 through 2000.
On September 3, 1991, the Company completed a financial restructuring (the
Restructuring) which involved issuing common and preferred stock to
various parties. The Company believes that the Restructuring did not
result in a "change in ownership" under Section 382 of the Internal
Revenue Code. However, Section 382 and related regulations promulgated by
the Internal Revenue Service (IRS) are extremely complex, and the
Company's assessment of whether or not a "change in ownership" occurred
involves judgments as to certain factual issues and interpretations as to
certain legal issues for which there is little guidance.
Through December 30, 1995, the Company has utilized an aggregate of
$34,900,000 in net operating loss carryforwards and $1,400,000 in general
business credit carryforwards that were generated prior to the
Restructuring. The utilization of these carryforwards and related tax
benefits could be significantly restricted or eliminated if the
Restructuring is ultimately deemed to constitute a "change in ownership." <PAGE>
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
Net sales for the third quarter of 1996 were $95.1 million, an increase of $6.9
(7.9%) compared to the third quarter of 1995. For the quarter, sales of home
fashions products were up $5.6 million (10.2%) and sales of apparel fabrics
products were up $1.4 million (4.0%).
The increase in sales of home fashions products was due to higher unit volume
offset somewhat by lower average pricing reflecting a competitive pricing
environment. The increase in sales of apparel fabric products was due to sales
of yarn and increased sales of upholstery and craft and decorator fabrics,
offset partially by declines in sales of shirting fabrics and sales of knit
velour fabrics caused by the Company's withdrawal from the knit products line
in the second quarter of 1996. During the third quarter, the demand for
apparel fabrics improved somewhat, and the Company expects to run its
manufacturing operations at budgeted capacities during the fourth quarter.
However, even though demand has picked up some, the pricing environment for
these fabrics continues to be extremely competitive.
Gross profit for the third quarter of 1996 was $19.2 million (20.2% of sales),
up $1.1 million or 6.1% from the third quarter of 1995 during which gross
profit represented 20.5% of sales. The increase in the dollar amount of gross
profits was due to higher unit volumes. The reduction in gross margin
percentage reflects a competitive pricing environment, higher cotton costs, and
the impact of a recent wage increase partially offset by the sale of a better
mix of products and better manufacturing performance during the quarter.
Selling, general, and administrative expenses for the third quarter of 1996
were down $301,000 as compared to the third quarter of 1995. The decrease was
due primarily to lower costs associated with the operation of fewer factory
stores.
Due to the factors described above, operating income for the third quarter of
1996 was $8.3 million, up $1.4 million or 20.4% from the third quarter of 1995.
Interest expense for the third quarter of 1996 was $4.5 million, a decrease of
$1.1 million or 20% from the third quarter of 1995. The decrease in interest
expense was due to a combination of lower debt levels and lower average rates.
The lower debt levels reflect the conversion from debt to common equity of the
Company's Convertible Junior Subordinated Notes (Junior Notes) in September
1995 and reduced debt outstanding under the Company's revolving credit
agreement because of reduced working capital needs. The lower average interest
rates are due to the conversion of the Junior Notes referred to above and lower
rates on the Company's floating rate debt.
The income tax provision was $1.5 million in the third quarter of 1996 (39.6%
of pretax income). This is up $700,000 or 89.6% from the $800,000 recorded for
the third quarter of 1995. The high effective tax rate for the third quarter
of 1995 reflects the nondeductibility of interest on the Junior Notes.
Accordingly, the Company recorded a net profit of $2.3 million for the third
quarter of 1996.
<PAGE>
<PAGE> 9
Net sales for the first three quarters of 1996 were $272.0 million, which was
down $11.2 million or 4.0% from the corresponding period in 1995. Sales of
home fashions products were up $7.6 million (4.6%), while sales of apparel
fabrics were $18.8 million (16.0%) lower during the applicable period.
The increase in sales of home fashions products for the first nine months of
1996, as compared to the corresponding period in 1995, was primarily due to
higher unit volume. The decrease in sales of apparel fabrics reflects lower
unit volume of shirting fabrics, particularly commodity white and blue oxford,
due to a sluggish retail environment for their products during the first half
of 1996.
Gross profit for the first nine months of 1996 was $51.1 million (18.8% of
sales) down $7.4 million or 12.6% from the first nine months of 1995, during
which gross margins represented 20.6% of sales. The decrease in gross profit
was due to lower sales of apparel fabrics, higher cotton costs and poor
manufacturing performance associated with abbreviated running schedules due to
the weak order position for apparel fabrics during most of the period.
Selling, general and administrative expenses were up slightly $198,000 (0.6%)
with the comparable period in 1995. Higher rent expense for the Company's New
York office and showrooms was offset by lower costs from the operation of fewer
factory stores and lower merchandising and selling expenses during the period.
For the reasons described above, operating income for the first nine months was
$17.2 million, down $7.6 million or 30.6% from the first nine months of 1995.
Interest expense for the first nine months of 1996 was $14.0 million, a
decrease of $3.2 million or 18.6% from the comparable period during 1995. The
decrease in interest expense was due to the conversion from debt to equity of
the Company's Junior Notes in September 1995 and lower rates on the Company's
floating rate debt.
The income tax provision was $1.4 million for the nine months ended September
26, 1996 (39.5% of pretax income). This is down $2.7 million or 65.4% from the
$4.2 million (54.5% of pretax income) recorded for the comparable period of
1995. The high effective tax rate for the first nine months of 1995 reflects
the nondeductibility of interest on the Junior Notes that were outstanding
during that period. Accordingly, the Company recorded a net profit of $2.2
million for the first nine months of 1996.
LIQUIDITY AND CAPITAL RESOURCES
General
The Company believes that internally generated cash flow, supplemented by
borrowings under its revolving credit facility and vendor financing, will be
sufficient to meet its foreseeable debt service requirements, capital
expenditures, and working capital needs. The Company is considered highly
leveraged, with a debt to total capital ratio of 67.7% at September 28, 1996.
<PAGE>
<PAGE> 10
Working Capital
Net cash generated from operating activities was $27.8 million in the nine
months ended September 28, 1996. Included in that amount is a source of cash
from operating assets and liabilities of $8.9 million, primarily comprised of a
$8.5 million source from operating working capital (accounts receivable - $2.8
million source, inventories - $7.3 million source, and accounts payable and
accrued expenses - $1.5 million use).
During the comparable nine month period ended September 30, 1995, net cash of
$9.7 million was generated from operating activities. Included in that amount
was a use of cash for operating assets and liabilities of $12.7 million
primarily consisting of a $13.2 million use for operating working capital
(accounts receivable - $4.8 million source, inventories $17.8 million use, and
accounts payable and accrued expenses - $0.2 million use).
Credit Facilities and Vendor Financing
The Company maintains a $60 million revolving credit agreement with a lender
having an expiration date of January 5, 1999. At September 28, 1996, the
Company had aggregate borrowings of $4.2 million outstanding under the credit
agreement and had aggregate unused borrowing availability of $53.9 million.
Borrowings under the credit agreement are secured by the Company's accounts
receivable, inventories and current assets related thereto, and bear interest
at the prime rate (8.25% at September 28, 1996) or Libor plus 2% (7.63% at
September 28, 1996), at the Company's option. The credit agreement contains
certain covenants requiring the maintenance of a certain cash interest coverage
ratio and a minimum net worth. The amount available for borrowing under the
credit agreement is based upon a borrowing base formula which is dependent on
the eligible level of accounts receivable and inventories, less $10 million.
In addition, the Company finances certain capital expenditures through vendors
of the capital assets, and will continue to utilize this method of financing
where it deems appropriate.
Capital Improvements
During the first nine months of 1996, the Company purchased $24.4 million in
equipment and manufacturing improvements. Of that amount, $4.2 million was
financed through vendors pursuant to long-term loans secured by the equipment
and the improvements. The Company expects to continue modernizing and making
capital improvements over the next several years, which are anticipated to be
financed through cash generated by operations, vendor financing, and borrowings
under the credit agreement.<PAGE>
<PAGE> 11
PART II - OTHER INFORMATION
Items 1 - 5. No disclosure required.
Item 6. Exhibits and Reports on Form 8-K.
(a)
Exhibit No. Description of Exhibit
- ----------- ----------------------
10.7 Employment Agreement dated as of September 3, 1996, between
Dan River Inc. and Joseph L. Lanier, Jr.
10.8 Employment Agreement dated as of September 3, 1996, between
Dan River Inc. and Richard L. Williams
10.9 Employment Agreement dated as of September 3, 1996, between
Dan River Inc. and Barry F. Shea
27 Financial Data Schedule, which is submitted electronically
to the Securities and Exchange Commission for information
only and not filed.
(b) Reports on Form 8-K.
None.
<PAGE>
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
DAN RIVER INC.
<TABLE>
<S> <C>
Date: October 24, 1996 /s/ Barry F. Shea
-----------------------------------
Barry F. Shea
Vice President-Chief Financial Officer
(Authorized Signing Officer and
Principal Financial Officer)
</TABLE>
<PAGE>
<PAGE> 13
Exhibit No. Description of Exhibit Page No.
- ----------- ---------------------- --------
10.7 Employment Agreement dated as of September 3,
1996, between Dan River Inc. and Joseph L.
Lanier, Jr. 14
10.8 Employment Agreement dated as of September 3,
1996, between Dan River Inc. and Richard L.
Williams 23
10.9 Employment Agreement dated as of September 3,
1996, between Dan River Inc. and Barry F. Shea 32
27 Financial Data Schedule, which is submitted
electronically to the Securities and Exchange
Commission for information only and not filed. 41
<PAGE> 14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered
into on this 3rd day of September, 1996, by and between JOSEPH L. LANIER, JR.
(the "Executive"), and DAN RIVER INC., a Georgia corporation (the "Company");
W I T N E S S E T H:
WHEREAS, the Executive has been employed by the Company as the Chief
Executive Officer and Chairman of the Board of the Company since November,
1989; and
WHEREAS, the Company desires to continue to employ the Executive, and
the Executive desires to continue to be employed by the Company, on the terms
and conditions contained herein; and
WHEREAS, to induce the Executive to continue in the employ of the
Company, the Company wishes to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
Section 1. Employment
1.1. Duties. Subject to the terms hereof, the Company hereby
employs the Executive as the Chief Executive Officer and Chairman of the Board
of Directors of the Company, and the Executive hereby accepts such employment.
Subject to customary responsibility and oversight of the Board of Directors of
the Company (the "Board"), the Executive will have such responsibility and
authority regarding the operations and management of the Company as is
customary for a chief executive officer, including, without limitation, (i) the
responsibility and authority to make day-to-day manufacturing, marketing,
procurement and strategy decisions, (ii) the responsibility and authority to
make personnel decisions, including hiring and termination decisions, and,
subject to compliance with the merit budget to be approved annually by the
Board, compensation decisions relating to all employees of the Company (other
than with respect to the Executive and other than with respect to the Chief
Financial Officer and the President of the Company whose compensation will be
determined by the Executive in consultation with the Board) including decisions
concerning participation in the Dan River Inc. Management Incentive Plan (the
"MIP") and any other employee benefit plans, and (iii) the responsibility and
authority to take other actions necessary to implement the annual business plan
of the Company. The Executive agrees that during the employment of the
Executive pursuant to this Agreement, the Executive shall devote such business
time and attention to the business of the Company as is consistent with his
past practices as Chief Executive Officer of the Company.
<PAGE>
<PAGE> 15
1.2. Other Activities. The Executive may, without limitation,
(i) serve on corporate, civic or charitable boards or committees, (ii) deliver
lectures, fulfill speaking engagements or teach at educational institutions and
(iii) manage personal investments, provided such activities do not materially
interfere with the performance of the Executive's responsibilities to the
Company hereunder. The parties hereto expressly understand and agree that to
the extent the Executive has engaged in any such activities prior to the date
of this Agreement, any subsequent conduct of activities similar in nature and
scope to such previous activities shall not be deemed to materially interfere
with the performance of the Executive's duties hereunder.
Section 2. Compensation; Expenses
2.1. Salary. During the term of his employment hereunder, the
Company shall pay the Executive a base salary (the "Base Salary") at a rate of
$420,116.32 per annum for the period commencing on the date hereof and ending
November 11, 1996 (the "Review Date"). The Board shall review the compensation
payable to the Executive hereunder as of the Review Date and annually
thereafter and shall increase such compensation at the time of each such review
by an amount which the Board deems appropriate in light of the Company's
performance; provided, however, that the Base Salary shall be increased during
the term of this Agreement by at least an amount necessary to give effect to
the consumer price index (excluding housing) as published by the United States
Department of Labor or any substantially similar successor index (the "CPI
Adjustment"); provided, further, however, that no CPI Adjustment shall be made
during any year of the term of this Agreement if, during the immediately
preceding year, there has been a material adverse change in the business or
operations of the Company. The Base Salary shall be paid to the Executive in
equal bi-monthly or monthly installments in accordance with applicable payroll
policies, less all applicable withholding taxes.
2.2. Bonus. In addition to the Base Salary, the Company shall
pay the Executive, for each fiscal year ending during the term of this
Agreement, an annual bonus (the "Bonus") pursuant to the MIP in existence as of
the date hereof, or any comparable or successor plan. The Bonus shall be
payable in cash promptly after the date on which the audited financial
statements of the Company are first available for the fiscal year for which the
Bonus is awarded, unless the Executive shall otherwise timely elect to defer
the receipt of such Bonus under any deferred compensation plan of the Company
then in effect. Under no circumstances shall the MIP, as in effect as of the
date hereof, including, without limitation, any performance targets that have
been established with respect thereto, be amended during the term of this
Agreement without the consent of the Executive, which consent shall be
evidenced by a writing to such effect or the affirmative vote by the Executive
at the Board meeting approving any such amendment to the MIP.
2.3. Expenses. The Executive shall be reimbursed promptly for
all reasonable business-related expenses incurred by the Executive in
accordance with the policies and procedures of the Company applicable to other
senior executives thereof.
<PAGE>
<PAGE> 16
Section 3. Term; Termination of Agreement.
3.1. Term; Termination. Provided that the Executive is employed
on September 2, 1996, the employment of the Executive pursuant to this
Agreement shall continue until the earlier of (i) September 3, 2001, or (ii)
the occurrence of any of the following events:
(a) the death or total disability of the Executive (total
disability meaning the failure of the Executive to perform his normal
required services hereunder for a period of six consecutive months
during the term hereof by reason of the Executive's mental or
physical disability) (a "Disability Termination Event");
(b) termination by the Company of the Executive's employment
hereunder for "Good Cause," which shall exist upon the occurrence of
any of the following: (i) the Executive is convicted of, pleads
guilty to, or confesses to any felony or any act of fraud,
misappropriation or embezzlement, (ii) the Executive engages in a
fraudulent act to the material damage or prejudice of the Company, or
(iii) the Executive otherwise fails to comply with the terms of this
Agreement or deviates from any written policies or directives of the
Board, in either such case to the material detriment of the Company,
and, within 30 days after written notice from the Board of such
failure or deviation, the Executive has not corrected such failure
(in any such case, a "Good Cause Termination Event");
(c) termination by the Company of the Executive's employment
hereunder for any reason other than as a result of a Good Cause
Termination Event (a "No Cause Termination Event");
(d) termination by the Executive of the Executive's employment
hereunder for "Good Reason", which shall mean (i) the assignment to
the Executive of any duties inconsistent in any material respect with
the Executive's position (including status, offices, titles and
reporting requirements), authority or duties or responsibilities as
contemplated by Section 1 hereof or any other action by the Company
that results in a material diminishment in such position, authority,
duties or responsibilities, other than action or inaction on the part
of the Company that is corrected by the Company within 30 days after
receipt of written notice thereof given by the Executive, (ii) any
failure by the Company to comply with the terms of this Agreement,
including, without limitation, Sections 2 and 5 hereof, which is not
corrected by the Company within 30 days after receipt of written
notice thereof given by the Executive, (iii) the Company's requiring
the Executive to be based at any office or location more than 40
miles away from that at which the Executive is based as of the date
of this Agreement, except for travel reasonably required consistent
with past practices, in the performance of the Executive's
responsibilities, or (iv) any purported termination by the Company of
the Executive's employment pursuant to this Agreement other than as
permitted herein, in each such case without the prior written consent
of the Executive (in any such case, a "Good Reason Termination
Event"); or
(e) voluntary termination by the Executive of the Executive's
employment hereunder other than for "Good Reason" (as defined above)
(a "Voluntary Termination Event");<PAGE>
<PAGE> 17
(f) the occurrence of a "Change in Control" in respect of the
Company, which shall mean any event or series of events, other than
events or series of events proposed or approved in writing by the
Executive, which result in any "Person" (as hereinafter defined) and
its "Affiliates" (as hereinafter defined) or any group of Persons (as
the term "group" is used in Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules thereunder), other than the
Executive and Metropolitan Life Insurance Company and his or its
Affiliates as a group, owning or controlling capital stock of the
Company possessing the voting power (under ordinary circumstances) to
elect a majority of the Board (a "Control Termination Event"). For
purposes of this Agreement, "Person" shall mean an individual, a
partnership, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization or a
governmental entity or any department, agency or political
subdivision thereof. For purposes of this Agreement, "Affiliate"
shall mean (i) with respect to any particular natural Person, such
Person's spouse, descendants (whether natural or adopted) and other
relatives, and (ii) with respect to any particular Person, any other
Person, controlling, controlled by or under common control with such
particular Person.
3.2. Notice of Termination. Any termination of the Executive's
employment hereunder by the Company or the Executive (other than by reason of
death) shall be communicated by a Notice of Termination to the other party
hereto given in accordance with the requirements of Section 7.10 of this
Agreement and in the case of terminations contemplated by Sections 3.1(a) and
(b) of this Agreement, no termination shall become effective sooner than 10
days after the date of delivery of the Notice of Termination. For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, and
(ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
Section 4. Result of Termination.
4.1. Termination As Result Of Voluntary or Good Cause
Termination Events. If the Executive's employment hereunder is terminated
prior to the fifth anniversary of the date hereof as a result of the occurrence
of a Voluntary Termination Event or a Good Cause Termination Event, as of the
date of the termination of Executive's employment hereunder, the Company shall
have no further obligation to pay to the Executive any Base Salary, Bonus or
any other benefits pursuant to this Agreement; provided, however, that the
Company shall pay to the Executive any vested compensation previously deferred
by the Executive and not paid as of the date of such termination; provided,
further, however, that the Company shall have the right to deduct from any such
deferred compensation any amounts owed to the Company by the Executive pursuant
to any promissory notes or Company advances. If such termination occurs prior
to the end of any pay period, the Executive shall be entitled to receive a
portion of the Base Salary and Bonus for such pay period prorated to the date
on which the Executive's employment is terminated.
<PAGE>
<PAGE> 18
4.2. Termination As Result Of No Cause, Control or Good Reason
Termination Event. If the Executive's employment hereunder is terminated as a
result of the occurrence of a No Cause Termination Event, a Control Termination
Event or a Good Reason Termination Event, the Company shall pay to the
Executive (a) an amount equal to 100% of the aggregate Base Salary then in
effect that would have been payable to the Executive pursuant to this Agreement
if the Executive had remained employed by the Company for the twenty-four
consecutive months immediately following the termination of his employment
hereunder, (b) if such termination occurs prior to the end of any pay period, a
portion of the Base Salary and Bonus for such pay period prorated to the date
on which the Executive's employment is terminated, (c) any vested compensation
previously deferred by the Executive and not yet paid, and (d) all reasonable
business-related expenses incurred by the Executive prior to such termination
for which the Executive would have been reimbursed pursuant to Section 2.5
hereof (the amounts referred to in clauses (a), (b), (c) and (d) being the
"Severance Payments"). The Severance Payments shall be paid by the Company to
the Executive within 10 days after such termination. In addition to the
Severance Payments, the Company shall continue to provide to the Executive all
benefits set forth in Section 5.1 for twenty-four consecutive months following
such termination (the "Severance Benefits"). To the extent that all or any
portion of the Severance Payments and the Severance Benefits is subject to
excise tax under Section 280G and 4999 of the Internal Revenue Code of 1986, as
amended, the Company shall pay to the Executive any amounts necessary to
reimburse the Executive in full for any such excise tax payable by the
Executive in respect of the Severance Payments and the Severance Benefits and
for any income taxes payable by the Executive in respect of such payments by
the Company to the Executive (the "Tax Reimbursement"). Other than the
Severance Payments, the Severance Benefits and the Tax Reimbursement, the
Company shall have no further obligation to pay the Executive the Base Salary,
Bonus or any other benefits pursuant to this Agreement.
4.3. INTENTIONALLY OMITTED.
4.4. Termination As Result of Disability Termination Event. If
the Executive's employment hereunder is terminated as a result of a Disability
Termination Event, as of the date of the termination of the Executive's
employment hereunder, the Company shall have no further obligation to pay the
Executive any Base Salary, Bonus or any other benefits pursuant to this
Agreement; provided, however, that the Company shall pay to the Executive any
vested compensation previously deferred by the Executive and not paid as of the
date of such termination. If such termination occurs prior to the end of any
pay period, the Executive shall be entitled to receive a portion of the Base
Salary and Bonus for such pay period prorated to the date on which the
Executive's employment is terminated. Notwithstanding the foregoing, if this
Agreement is terminated as a result of the (a) death of the Executive, the
Executive's family shall be entitled to receive benefits at least equal to
those provided by the Company to surviving families of senior executives of the
Company under such plans, programs and policies relating to family death
benefits, if any, in effect on the date of the Executive's death, or (b) total
disability of the Executive as described in Section 3.1(a), in addition to the
benefits contemplated by Section 5.2, the Executive shall be entitled to
receive disability and other benefits at least equal to those provided by the
Company to disabled employees and their families in accordance with such plans,
program and policies relating to disability, if any, in effect on the date of
the Executive's total disability.
<PAGE>
<PAGE> 19
Section 5. Additional Employment Benefits
5.1. Benefits. The Company shall provide the Executive with
such medical, dental, life and disability insurance as the Board shall
authorize from time to time for the benefit of senior executives of the Company
generally. In addition, the Executive shall have the right to participate in
all incentive, savings and retirement plans available to senior executives of
the Company generally and to receive such additional fringe benefits as the
Board shall authorize from time to time for the benefit of senior executives of
the Company generally.
5.2. Vacation. The Executive shall receive at least four (4)
weeks of paid vacation time each calendar year during the term of his
employment hereunder, which vacation shall be prorated if the Executive's
employment hereunder is terminated prior to December 31 of any year.
Section 6. Covenants
6.1. Confidential Information. Other than in connection with
performing his duties in good faith hereunder, the Executive hereby agrees that
he will hold in confidence any confidential information relating to the
business or operations of the Company ("Confidential Information") and will not
use or disclose the same to any third party for any reason (unless disclosure
is compelled by judicial or administrative process, or in the reasonable
opinion of the Executive's counsel, by other requirements of law).
Confidential Information shall not include information (a) known by the
Executive prior to his employment by the Company in any capacity, (b)
ascertained by the Executive other than in his capacity as the Chief Executive
Officer of the Company, (c) ascertainable or obtained from public or published
sources, or (d) that is or becomes known to the public (other than through a
breach of this Agreement).
6.2. Nonsolicitation. If the Executive's employment hereunder
is terminated as a result of the occurrence of a Voluntary Termination Event or
a Good Cause Termination Event, the Executive agrees that he shall not, during
the two year period after the date of such termination, without the Company's
prior written consent, directly or indirectly, knowingly solicit or encourage
to leave the employment of the Company, any salaried employee of the Company or
hire any salaried employee (other than the personal secretary of the Executive
or a relative of the Executive) who has left the employment of the Company
within one year of such termination of the Executive's employment; provided,
however, that the Executive shall not be prohibited from hiring any employee of
the Company whose employment has been terminated by the Company without good
cause.
Section 7. Miscellaneous
7.1. Indemnification. The Company shall indemnify and hold the
Executive harmless to the fullest extent permitted under applicable law as it
presently exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Company to
provide broader indemnification rights than said law permitted prior to such
amendment) against all expense, liability and loss (including attorneys' fees, <PAGE>
<PAGE> 20
judgements, fines, ERISA excise taxes or penalties and amounts to be paid in
settlement) incurred in connection with any asserted or threatened action, suit
or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he was an officer, director or employee of the Company
or its former parent, Braelan Corp. ("Braelan") or was serving at the request
of the Company or Braelan as an officer, director, employee, fiduciary or agent
of another corporation or other entity. In the event that the Executive shall
receive written notice of any claim or proceeding against him that, if
successful, might result in a claim under this Section 7.1, the Executive shall
give written notice to the Company of such claim or proceeding and shall permit
the Company to participate in the defense of such claim or proceeding by
counsel of the Company's own choosing and at the expense of the Company. In
addition, upon the written request of the Company, the Company may assume at
its own expense the defense of any such claim or proceeding, provided that the
Executive may participate at his expense in any such defense to the extent he
may deem necessary or appropriate to protect his interests. Upon the final
determination of any such claim or proceeding, the defense of which has been
assumed by the Company, the Company shall fully discharge at its own expense
all liability of the Executive and shall be entitled at its own expense, but
without any liability of the Executive therefor, to compromise or settle any
such claim or proceeding upon terms reasonably satisfactory to both the Company
and the Executive.
7.2. No Disclosure. Each party hereto agrees that if the
Executive's employment by the Company is terminated for any reason whatsoever,
each party hereto will keep confidential and not make any public disclosures
concerning the circumstances relating to such termination.
7.3. No Litigation. The Executive represents and warrants to
the Company that there are no litigation proceedings pending or, to his
knowledge, threatened against the Executive in his individual capacity or in
any capacity that might give rise to a claim for indemnification under Section
7.1 hereof.
7.4. Binding Effect. This Agreement shall inure to the benefit
of and shall be binding upon the Executive and his executor, administrator,
heirs, personal representative and assigns, and the Company and its successors
and assigns; provided, however, that the Executive shall not be entitled to
assign or delegate any of his rights or obligations hereunder without the prior
written consent of the Company.
7.5. No Mitigation. In no event shall the Executive be
obligated to seek employment in mitigation of amounts payable to the Executive
pursuant to Section 4 hereof, and the employment of the Executive after the
termination of the Executive's employment by the Company shall not affect in
any way or offset any amounts payable to the Executive pursuant to this
Agreement.
7.6. Fees. The Company agrees to pay to the Executive to the
fullest extent permitted by law all fees and expenses (including reasonable
attorneys' fees) incurred by the Executive in seeking to enforce any provision
of this Agreement, provided that the Executive shall refund such fee and
expense payments if it is finally judicially determined that the Executive is
not entitled to any relief.
<PAGE>
<PAGE> 21
7.7. Governing Law. This Agreement shall be deemed to be made
in, and in all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of Georgia, without reference to
principles of conflict of laws. No provision of this Agreement or any related
document shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority by reason
of such party having or being deemed to have structured or drafted such
Provision.
7.8. Survival of Certain Agreements. The agreements and
covenants set forth in Section 6.1 hereof shall survive the termination of the
Executive's employment under this Agreement for any reason, and the agreements
and covenants set forth in Section 6.2 hereof shall survive the termination of
the Executive's employment under this Agreement as a result of the occurrence
of a Voluntary Termination Event or a Good Cause Termination Event.
7.9. Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
7.10. Notices. Unless otherwise agreed to in writing by the parties
hereto, all communications provided for hereunder shall be in writing and shall
be deemed to be given when delivered in person or five (5) business days after
being sent by first class mail, certified, return receipt requested, and
addressed as follows:
(a) If to the Executive, addressed to:
Mr. Joseph L. Lanier, Jr.
P.O. Box 610
802 3rd Avenue
West Point, Georgia 31833
(b) If to the Company, addressed to:
Dan River Inc.
2291 Memorial Drive
Danville, Virginia 24541
Attention: Board of Directors
c/o Corporate Secretary
or to such other person or address as shall be furnished in writing by any
party to the other prior to the giving of the applicable notice or
communication.
7.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
7.12. Entire Agreement. This Agreement is intended by the parties
hereto to be the final expression of their agreement with respect to the
subject matter hereof and is the complete and exclusive statement of the terms
thereof, notwithstanding any representations, statements or agreements to the
contrary heretofore made. This Agreement may be modified only by a written
instrument signed by each of the parties hereto.<PAGE>
<PAGE> 22
7.13. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its Affiliates for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have under
any other agreements with the Company or any of its Affiliates. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan or program of the Company or any of its Affiliates at or
subsequent to the date on which his employment hereunder is terminated shall be
payable in accordance with such plan or program.
7.14. Severability. In the event that any provision of this
Agreement shall be deemed invalid or unenforceable, the remaining provisions of
this Agreement shall remain in full force and effect.
7.15. Prior Agreement. This Agreement succeeds an Employment
Agreement dated September 3, 1991, which expires on September 2, 1996 and
remains in full force and effect through and including such date, with this
Agreement to take effect on September 3, 1996 in renewal and amendment of such
prior Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE COMPANY
DAN RIVER INC.
By:---------------------------
Title:------------------------
[CORPORATE SEAL]
ATTEST:
By:---------------------------
Title:------------------------
THE EXECUTIVE
-----------------------------
Joseph L. Lanier, Jr.
<PAGE> 23
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered
into on this 3rd day of September, 1996, by and between RICHARD L. WILLIAMS
(the "Executive"), and DAN RIVER INC., a Georgia corporation, (the "Company");
W I T N E S S E T H:
WHEREAS, the Executive has been employed by the Company as the
President of the Company since November, 1989; and
WHEREAS, the Company desires to continue to employ the Executive, and
the Executive desires to continue to be employed by the Company, on the terms
and conditions contained herein; and
WHEREAS, to induce the Executive to continue in the employ of the
Company, the Company wishes to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
Section 1. Employment
1.1. Duties. Subject to the terms hereof, the Company hereby
employs the Executive as the President of the Company, and the Executive hereby
accepts such employment. The Executive agrees that during the employment of
the Executive pursuant to this Agreement, the Executive shall devote his full
business time and attention to the business of the Company.
1.2. Other Activities. The Executive may, without limitation,
(i) serve on corporate, civic or charitable boards or committees, (ii) deliver
lectures, fulfill speaking engagements or teach at educational institutions and
(iii) manage personal investments, provided such activities do not materially
interfere with the performance of the Executive's responsibilities to the
Company hereunder. The parties hereto expressly understand and agree that to
the extent the Executive has engaged in any such activities prior to the date
of this Agreement, any subsequent conduct of activities similar in nature and
scope to such previous activities shall not be deemed to materially interfere
with the performance of the Executive's duties hereunder.
Section 2. Compensation; Expenses
2.1. Salary. Commencing on the date of this Agreement, the
Company shall pay the Executive a base salary (the "Base Salary") at a rate
equal to the rate being paid to the Executive immediately prior to the
execution of this Agreement. During the term of this Agreement, the Chief
Executive Officer of the Company shall determine the Base Salary payable to the
Executive in consultation with the Board.
<PAGE>
<PAGE> 24
2.2. Bonus. In addition to the Base Salary, the Company shall
pay the Executive, for each fiscal year ending during the term of this
Agreement, an annual bonus (the "Bonus") pursuant to the MIP in existence as of
the date hereof, or any comparable or successor plan. The Bonus shall be
payable in cash promptly after the date on which the audited financial
statements of the Company are first available for the fiscal year for which the
Bonus is awarded, unless the Executive shall otherwise timely elect to defer
the receipt of such Bonus under any deferred compensation plan of the Company
then in effect. Under no circumstances shall the MIP, as in effect as of the
date hereof, including, without limitation, any performance targets that have
been established with respect thereto, be amended during the term of this
Agreement without the consent of the Executive, which consent shall be
evidenced by a writing to such effect or the affirmative vote by the Executive
at the Board meeting approving any such amendment to the MIP.
2.3. Expenses. The Executive shall be reimbursed promptly for
all reasonable business-related expenses incurred by the Executive in
accordance with the policies and procedures of the Company applicable to other
senior executives thereof.
Section 3. Term; Termination of Agreement
3.1. Term; Termination. Provided that the Executive is employed
on September 2, 1996, the employment of the Executive pursuant to this
Agreement shall continue until the earlier of (i) September 3, 2001, or (ii)
the occurrence of any of the following events:
(a) the death or total disability of the Executive (total
disability meaning the failure of the Executive to perform his normal
required services hereunder for a period of six consecutive months
during the term hereof by reason of the Executive's mental or
physical disability) (a "Disability Termination Event");
(b) termination by the Company of the Executive's employment
hereunder for "Good Cause," which shall exist upon the occurrence of
any of the following: (i) the Executive is convicted of, pleads
guilty to, or confesses to any felony or any act of fraud,
misappropriation or embezzlement, (ii) the Executive engages in a
fraudulent act to the material damage or prejudice of the Company, or
(iii) the Executive otherwise fails to comply with the terms of this
Agreement, breaches any obligation or violates any duty to the
Company or Dan River under applicable law or deviates from any
written policies or directives of the Board, in any such case to the
material detriment of the Company or Dan River, and, within 30 days
after written notice from the Board of such failure, breach,
violation or deviation, the Executive has not corrected such failure
(in any such case, a "Good Cause Termination Event");
(c) termination by the Company of the Executive's employment
hereunder for any reason other than as a result of a Good Cause
Termination Event (a "No Cause Termination Event");
<PAGE>
<PAGE> 25
(d) termination by the Executive of the Executive's employment
hereunder for "Good Reason", which shall mean (i) the assignment to
the Executive of any duties inconsistent in any material respect with
the Executive's position (including status, offices, titles and
reporting requirements), authority or duties or responsibilities as
contemplated by Section 1 hereof or any other action by the Company
that results in a material diminishment in such position (including,
without limitation, reduction in the Executive's Base Salary from
that in effect on the date hereof), authority, duties or
responsibilities, other than action or inaction on the part of the
Company that is corrected by the Company within 30 days after receipt
of written notice thereof given by the Executive, (ii) any material
failure by the Company to comply with the terms of this Agreement,
including, without limitation, Sections 2 and 5 hereof, which is not
corrected by the Company within 30 days after receipt of written
notice thereof given by the Executive, (iii) the Company's requiring
the Executive to be based at any office or location more than 40
miles away from that at which the Executive is based as of the date
of this Agreement, except for travel reasonably required consistent
with past practices, in the performance of the Executive's
responsibilities, or (iv) any purported termination by the Company of
the Executive's employment pursuant to this Agreement other than as
permitted herein, in each such case without the prior written consent
of the Executive (in any such case, a "Good Reason Termination
Event"); or
(e) voluntary termination by the Executive of the Executive's
employment hereunder other than for "Good Reason" (as defined above)
(a "Voluntary Termination Event");
(f) the occurrence of a "Change in Control" in respect of the
Company, which shall mean any event or series of events which result
in any "Person" (as hereinafter defined) and its "Affiliates" (as
hereinafter defined) or any group of Persons (as the term "group" is
used in Section 13(d) of the Securities Exchange Act of 1934, as
amended, and the rules thereunder), other than Joseph L. Lanier, Jr.
and Metropolitan Life Insurance Company and his or its Affiliates as
a group, owning or controlling capital stock of the Company
possessing the voting power (under ordinary circumstances) to elect a
majority of the Board (a "Control Termination Event"). For purposes
of this Agreement, "Person" shall mean an individual, a partnership,
a corporation, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a governmental
entity or any department, agency or political subdivision thereof.
For purposes of this Agreement, "Affiliate" shall mean (i) with
respect to any particular natural Person, such Person's spouse,
descendants (whether natural or adopted) and other relatives, and
(ii) with respect to any particular Person, any other Person,
controlling, controlled by or under common control with such
particular Person.
3.2. Notice of Termination. Any termination of the Executive's
employment hereunder by the Company or the Executive (other than by reason of
death) shall be communicated by a Notice of Termination to the other party <PAGE>
<PAGE> 26
hereto given in accordance with the requirements of Section 7.10 of this
Agreement and in the case of terminations contemplated by Sections 3.1(a) and
(b) of this Agreement, no termination shall become effective sooner than 10
days after the date of delivery of the Notice of Termination. For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, and
(ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
Section 4. Result of Termination
4.1. Termination As Result Of Voluntary or Good Cause
Termination Events. If the Executive's employment hereunder is terminated
prior to the fifth anniversary of the date hereof as a result of the occurrence
of a Voluntary Termination Event or a Good Cause Termination Event, as of the
date of the termination of Executive's employment hereunder, the Company shall
have no further obligation to pay to the Executive any Base Salary, Bonus or
any other benefits pursuant to this Agreement; provided, however, that the
Company shall pay to the Executive any vested compensation previously deferred
by the Executive and not paid as of the date of such termination; provided,
further, however, that the Company shall have the right to deduct from any such
deferred compensation any amounts owed to the Company by the Executive pursuant
to any promissory notes or Company advances. If such termination occurs prior
to the end of any pay period, the Executive shall be entitled to receive a
portion of the Base Salary and Bonus for such pay period prorated to the date
on which the Executive's employment is terminated.
4.2. Termination As Result of No Cause, Control or Good Reason
Termination Event. If the Executive's employment hereunder is terminated as a
result of the occurrence of a No Cause Termination Event, a Control Termination
Event or a Good Reason Termination Event, the Company shall pay or shall cause
Dan River to pay to the Executive (a) an amount equal to 100% of the aggregate
Base Salary then in effect that would have been payable to the Executive
pursuant to this Agreement if the Executive had remained employed by the
Company for the twenty-four consecutive months immediately following the
termination of his employment hereunder, (b) if such termination occurs prior
to the end of any pay period, a portion of the Base Salary and Bonus for such
pay period prorated to the date on which the Executive's employment is
terminated, (c) any vested compensation previously deferred by the Executive
and not yet paid, and (d) all reasonable business-related expenses incurred by
the Executive prior to such termination for which the Executive would have been
reimbursed pursuant to Section 2.5 hereof (the amounts referred to in clauses
(a), (b), (c) and (d) being the "Severance Payments"). The Severance Payments
shall be paid by the Company to the Executive within 10 days after such
termination. In addition to the Severance Payments, the Company shall continue
to provide to the Executive all benefits set forth in Section 5.1 for
twenty-four consecutive months following such termination (the "Severance
Benefits"). To the extent that all or any portion of the Severance Payments
and the Severance Benefits is subject to excise tax under Section 280G and 4999
of the Internal Revenue Code of 1986, as amended, the Company shall pay to the
Executive any amounts necessary to reimburse the Executive in full for any such
excise tax payable by the Executive in respect of the Severance Payments and <PAGE>
<PAGE> 27
the Severance Benefits and for any income taxes payable by the Executive in
respect of such payments by the Company to the Executive (the "Tax
Reimbursement"). Upon the written request of the Executive at any time within
one year after the date of the termination of the Executive's employment
hereunder as a result of the occurrence of a No Cause Termination Event, a
Control Termination Event or a Good Reason Termination Event, the Company shall
reimburse any reasonable expenses incurred by the Executive in relocating the
Executive and his dependents to any location within the 48 contiguous United
States that is more than 40 miles from the Executive's residence on the date of
such termination to the extent any such expenses are not reimbursed by a new
employer of the Executive (the "Relocation Expenses"), and the Company shall
also pay the Executive such additional amounts necessary to reimburse the
Executive in full for any taxes payable with respect to Relocation Expenses
paid by the Company to the Executive (the "Relocation Tax Expense"). Other
than the Severance Payments, the Severance Benefits, the Tax Reimbursement, the
Relocation Expenses and the Relocation Tax Expense, the Company shall have no
further obligation to pay the Executive the Base Salary, Bonus or any other
benefits pursuant to this Agreement.
4.3. Termination As Result of Disability Termination Event. If
the Executive's employment hereunder is terminated as a result of a Disability
Termination Event, as of the date of the termination of the Executive's
employment hereunder, the Company shall have no further obligation to pay the
Executive any Base Salary, Bonus or any other benefits pursuant to this
Agreement; provided, however, that the Company shall pay the Executive any
vested compensation previously deferred by the Executive and not paid as of the
date of such termination. If such termination occurs prior to the end of any
pay period, the Executive shall be entitled to receive a portion of the Base
Salary and Bonus for such pay period prorated to the date on which the
Executive's employment is terminated. Notwithstanding the foregoing, if this
Agreement is terminated as a result of the (a) death of the Executive, the
Executive's family shall be entitled to receive benefits at least equal to
those provided by the Company to surviving families of senior executives of the
Company under such plans, programs and policies relating to family death
benefits, if any, in effect on the date of the Executive's death, or (b) total
disability of the Executive as described in Section-3.1(a), in addition to the
benefits contemplated by Section 5.2, the Executive shall be entitled to
receive disability and other benefits at least equal to those provided by the
Company to disabled employees and their families in accordance with such plans,
programs and policies relating to disability, if any, in effect on the date of
the Executive's total disability.
Section 5. Additional Employment Benefits
5.1. Benefits. The Company shall provide the Executive with
such medical, dental, life and disability insurance as the Board shall
authorize from time to time for the benefit of senior executives of the Company
generally. In addition, the Executive shall have the right to participate in
all incentive, savings and retirement plans available to senior executives of
the Company generally and to receive such additional fringe benefits as the
Board shall authorize from time to time for the benefit of senior executives of
the Company generally.
<PAGE>
<PAGE> 28
5.2. Vacation. The Executive shall receive at least four (4)
weeks of paid vacation time each calendar year during the term of his
employment hereunder, which vacation shall be prorated if the Executive's
employment hereunder is terminated prior to December 31 of any year.
Section 6. Covenants
6.1. Confidential Information. Other than in connection with
performing his duties in good faith hereunder, the Executive hereby agrees that
he will hold in confidence any confidential information relating to the
business or operations of the Company ("Confidential Information") and that he
will not use or disclose the same to any third party for any reason (unless
disclosure is compelled by judicial or administrative process, or in the
reasonable opinion of the Executive's counsel, by other requirements of law).
Confidential Information shall not include information (a) known by the
Executive prior to his employment by the Company in any capacity, (b)
ascertained by the Executive other than in his capacity as the President of the
Company, (c) ascertainable or obtained from public or published sources, or (d)
that is or becomes known to the public (other than through a breach of this
Agreement).
6.2. Nonsolicitation. If the Executive's employment hereunder
is terminated as a result of the occurrence of a Voluntary Termination Event or
a Good Cause Termination Event, the Executive agrees that he shall not, during
the two year period after the date of such termination, without the Company's
prior written consent, directly or indirectly, knowingly solicit or encourage
to leave the employment of the Company, any salaried employee of the Company or
hire any salaried employee (other than the personal secretary of the Executive
or a relative of the Executive) who has left the employment of the Company
within one year of such termination of the Executive's employment; provided,
however, that the Executive shall not be prohibited from hiring any employee of
the Company whose employment has been terminated by the Company without good
cause.
Section 7. Miscellaneous
7.1. Indemnification. The Company shall indemnify and hold the
Executive harmless to the fullest extent permitted under applicable law as it
presently exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Company to
provide broader indemnification rights than said law permitted prior to such
amendment) against all expense, liability and loss (including attorneys' fees,
judgements, fines, ERISA excise taxes or penalties and amounts to be paid in
settlement) incurred in connection with any asserted or threatened action, suit
or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he was an officer, director or employee of the Company
or its former parent, Braelan Corp. ("Braelan") or was serving at the request
of the Company or Braelan as an officer, director, employee, fiduciary or agent
of another corporation or other entity. In the event that the Executive shall
receive written notice of any claim or proceeding against him that, if
successful, might result in a claim under this Section 7.1, the Executive shall
give written notice to the Company of such claim or proceeding and shall permit
<PAGE>
<PAGE> 29
the Company to participate in the defense of such claim or proceeding by
counsel of the Company's own choosing and at the expense of the Company. In
addition, upon the written request of the Company, the Company may assume at
its own expense the defense of any such claim or proceeding, provided that the
Executive may participate at his expense in any such defense to the extent he
may deem necessary or appropriate to protect his interests. Upon the final
determination of any such claim or proceeding, the defense of which has been
assumed by the Company, the Company shall fully discharge at its own expense
all liability of the Executive and shall be entitled at its own expense, but
without any liability of the Executive therefor, to compromise or settle any
such claim or proceeding upon terms reasonably satisfactory to both the Company
and the Executive.
7.2. No Disclosure. Each party hereto agrees that if the
Executive's employment by the Company is terminated for any reason whatsoever,
each party hereto will keep confidential and not make any public disclosures
concerning the circumstances relating to such termination.
7.3. No Litigation. The Executive represents and warrants to
the Company that there are no litigation proceedings pending or, to his
knowledge, threatened against the Executive in his individual capacity or in
any capacity that might give rise to a claim for indemnification under Section
7.1 hereof.
7.4. Binding Effect. This Agreement shall inure to the benefit
of and shall be binding upon the Executive and his executor, administrator,
heirs, personal representative and assigns, and the Company and its respective
successors and assigns; provided, however, that the Executive shall not be
entitled to assign or delegate any of his rights or obligations hereunder
without the prior written consent of the Company.
7.5. No Mitigation. In no event shall the Executive be
obligated to seek employment in mitigation of amounts payable to the Executive
pursuant to Section 4 hereof, and, other than as specifically provided in
Section 4.2, the employment of the Executive after the termination of the
Executive's employment by the Company shall not affect in any way or offset any
amounts payable to the Executive pursuant to this Agreement.
7.6. Fees. The Company agrees to pay to the Executive to the
fullest extent permitted by law all fees and expenses (including reasonable
attorneys' fees) incurred by the Executive in seeking to enforce any provision
of this Agreement, provided that the Executive shall refund such fees and
expense payments if it is finally judicially determined that the Executive is
not entitled to any relief.
7.7. Governing Law. This Agreement shall be deemed to be made
in, and in all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of Georgia, without reference to
principles of conflict of laws. No provision of this Agreement or any related
document shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority by reason
of such party having or being deemed to have structured or drafted such
provision.
<PAGE>
<PAGE> 30
7.8. Survival of Certain Agreements. The agreements and
covenants set forth in Section 6.1 hereof shall survive the termination of the
Executive's employment under this Agreement for any reason.
7.9. Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
7.10. Notices. Unless otherwise agreed to in writing by the parties
hereto, all communications provided for hereunder shall be in writing and shall
be deemed to be given when delivered in person or five (5) business days after
being sent by first class mail, certified return receipt requested, and
addressed as follows:
(a) If to the Executive, addressed to:
Mr. Richard L. Williams
59 Warren Place
Montclair, New Jersey 07042
(b) If to the Company, addressed to:
Dan River Inc.
2291 Memorial Drive
Danville, Virginia 24541
Attention: Board of Directors
c/o Corporate Secretary
or to such other person or address as shall be furnished in writing by any
party to the other prior to the giving of the applicable notice or
communication.
7.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
7.12. Entire Agreement. This Agreement is intended by the parties
hereto to be the final expression of their agreement with respect to the
subject matter hereof and is the complete and exclusive statement of the terms
thereof, notwithstanding any representations, statements or agreements to the
contrary heretofore made. This Agreement may be modified only by a written
instrument signed by each of the parties hereto.
7.13. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its Affiliates for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have under
any other agreements with the Company or any of its Affiliates. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan or program of the Company or any of its Affiliates at or
subsequent to the date on which his employment hereunder is terminated shall be
payable in accordance with such plan or program.
<PAGE>
<PAGE> 31
7.14. Severability. In the event that any provision of this
Agreement shall be deemed invalid or unenforceable, the remaining provisions of
this Agreement shall remain in full force and effect.
7.15. Prior Agreement. This Agreement succeeds an Employment
Agreement dated September 3, 1991, which expires on September 2, 1996 and
remains in full force and effect through and including such date, with this
Agreement to take effect on September 3, 1996 in renewal and amendment of such
prior Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE COMPANY
DAN RIVER INC.
By:---------------------------
Joseph L. Lanier, Jr.
Chairman and CEO
[CORPORATE SEAL]
ATTEST:
By:---------------------------
Title:------------------------
THE EXECUTIVE
_____________________________
Richard L. Williams
<PAGE> 32
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered
into on this 3rd day of September, 1996, by and between BARRY F. SHEA (the
"Executive"), and DAN RIVER INC., a Georgia corporation (the "Company");
W I T N E S S E T H:
WHEREAS, the Executive has been employed by the Company as the Chief
Financial Officer of the Company since November, 1989; and
WHEREAS, the Company desires to continue to employ the Executive, and
the Executive desires to continue to be employed by the Company, on the terms
and conditions contained herein; and
WHEREAS, to induce the Executive to continue in the employ of the
Company, the Company wishes to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
Section 1. Employment
1.1. Duties. Subject to the terms hereof, the Company hereby
employs the Executive as the Chief Financial Officer of the Company, and the
Executive hereby accepts such employment. The Executive agrees that during the
employment of the Executive pursuant to this Agreement, the Executive shall
devote his full business time and attention to the business of the Company.
1.2. Other Activities. The Executive may, without limitation,
(i) serve on corporate, civic or charitable boards or committees, (ii) deliver
lectures, fulfill speaking engagements or teach at educational institutions and
(iii) manage personal investments, provided such activities do not materially
interfere with the performance of the Executive's responsibilities to the
Company hereunder. The parties hereto expressly understand and agree that to
the extent the Executive has engaged in any such activities prior to the date
of this Agreement, any subsequent conduct of activities similar in nature and
scope to such previous activities shall not be deemed to materially interfere
with the performance of the Executive's duties hereunder.
Section 2. Compensation; Expenses
2.1. Salary. Commencing on the date of this Agreement, the
Company shall pay the Executive a base salary (the "Base Salary") at a rate
equal to the rate being paid to the Executive immediately prior to the
execution of this Agreement. During the term of this Agreement, the Chief
Executive Officer of the Company shall determine the Base Salary payable to the
Executive in consultation with the Board.
<PAGE>
<PAGE> 33
2.2. Bonus. In addition to the Base Salary, the Company shall
pay the Executive, for each fiscal year ending during the term of this
Agreement, an annual bonus (the "Bonus") pursuant to the MIP in existence as of
the date hereof, or any comparable or successor plan. The Bonus shall be
payable in cash promptly after the date on which the audited financial
statements of the Company are first available for the fiscal year for which the
Bonus is awarded, unless the Executive shall otherwise timely elect to defer
the receipt of such Bonus under any deferred compensation plan of the Company
then in effect. Under no circumstances shall the MIP, as in effect as of the
date hereof, including, without limitation, any performance targets that have
been established with respect thereto, be amended during the term of this
Agreement without the consent of the Executive, which consent shall be
evidenced by a writing to such effect or the affirmative vote by the Executive
at the Board meeting approving any such amendment to the MIP.
2.3. Expenses. The Executive shall be reimbursed promptly for
all reasonable business-related expenses incurred by the Executive in
accordance with the policies and procedures of the Company applicable to other
senior executives thereof.
Section 3. Term; Termination of Agreement
3.1. Term; Termination. Provided that the Executive is employed
on September 2, 1996, the employment of the Executive pursuant to this
Agreement shall continue until the earlier of (i) September 3, 2001, or (ii)
the occurrence of any of the following events:
(a) the death or total disability of the Executive (total disability
meaning the failure of the Executive to perform his normal required services
hereunder for a period of six consecutive months during the term hereof by
reason of the Executive's mental or physical disability) (a "Disability
Termination Event");
(b) termination by the Company of the Executive's employment
hereunder for "Good Cause," which shall exist upon the occurrence of any of the
following: (i) the Executive is convicted of, pleads guilty to, or confesses to
any felony or any act of fraud, misappropriation or embezzlement, (ii) the
Executive engages in a fraudulent act to the material damage or prejudice of
the Company, or (iii) the Executive otherwise fails to comply with the terms of
this Agreement, breaches any obligation or violates any duty to the Company
under applicable law or deviates from any written policies or directives of the
Board, in any such case to the material detriment of the Company, and, within
30 days after written notice from the Board of such failure, breach, violation
or deviation, the Executive has not corrected such failure (in any such case, a
"Good Cause Termination Event");
(c) termination by the Company of the Executive's employment
hereunder for any reason other than as a result of a Good Cause Termination
Event (a "No Cause Termination Event");
(d) termination by the Executive of the Executive's employment
hereunder for "Good Reason", which shall mean (i) the assignment to the
Executive of any duties inconsistent in any material respect with the <PAGE>
<PAGE> 34
Executive's position (including status, offices, titles and reporting
requirements), authority or duties or responsibilities as contemplated by
Section 1 hereof or any other action by the Company that results in a material
diminishment in such position (including, without limitation, reduction in the
Executive's Base Salary from that in effect on the date hereof), authority,
duties or responsibilities, other than action or inaction on the part of the
Company that is corrected by the Company within 30 days after receipt of
written notice thereof given by the Executive, (ii) any material failure by the
Company to comply with the terms of this Agreement, including, without
limitation, Sections 2 and 5 hereof, which is not corrected by the Company
within 30 days after receipt of written notice thereof given by the Executive,
(iii) the Company's requiring the Executive to be based at any office or
location more than 40 miles away from that at which the Executive is based as
of the date of this Agreement, except for travel reasonably required consistent
with past practices, in the performance of the Executive's responsibilities, or
(iv) any purported termination by the Company of the Executive's employment
pursuant to this Agreement other than as permitted herein, in each such case
without the prior written consent of the Executive (in any such case, a "Good
Reason Termination Event"); or
(e) voluntary termination by the Executive of the Executive's
employment hereunder other than for "Good Reason" (as defined above) (a
"Voluntary Termination Event"):
(f) the occurrence of a "Change in Control" in respect of the
Company, which shall mean any event or series of events which result in any
"Person" (as hereinafter defined) and its "Affiliates" (as hereinafter defined)
or any group of Persons (as the term "group" is used in Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules thereunder), other
than Joseph L. Lanier, Jr. and Metropolitan Life Insurance Company and his or
its Affiliates as a group, owning or controlling capital stock of the Company
possessing the voting power (under ordinary circumstances) to elect a majority
of the Board (a "Control Termination Event"). For purposes of this Agreement,
"Person" shall mean an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political
subdivision thereof. For purposes of this Agreement, "Affiliate" shall mean (i)
with respect to any particular natural Person, such Person's spouse,
descendants (whether natural or adopted) and other relatives, and (ii) with
respect to any particular Person, any other Person, controlling, controlled by
or under common control with such particular Person.
3.2. Notice of Termination. Any termination of the Executive's
employment hereunder by the Company or the Executive (other than by reason of
death) shall be communicated by a Notice of Termination to the other party
hereto given in accordance with the requirements of Section 7.10 of this
Agreement and in the case of terminations contemplated by Sections 3.1(a) and
(b) of this Agreement, no termination shall become effective sooner than 10
days after the date of delivery of the Notice of Termination. For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, and
(ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
<PAGE>
<PAGE> 35
Section 4. Result of Termination
4.1. Termination As Result Of Voluntary or Good Cause Termination
Events. If the Executive's employment hereunder is terminated prior to the
fifth anniversary of the date hereof as a result of the occurrence of a
Voluntary Termination Event or a Good Cause Termination Event, as of the date
of the termination of Executive's employment hereunder, the Company shall have
no further obligation to pay to the Executive any Base Salary, Bonus or any
other benefits pursuant to this Agreement; provided, however, that the Company
shall pay to the Executive any vested compensation previously deferred by the
Executive and not paid as of the date of such termination; provided, further,
however, that the Company shall have the right to deduct from any such deferred
compensation any amounts owed to the Company by the Executive pursuant to any
promissory notes or Company advances. If such termination occurs prior to the
end of any pay period, the Executive shall be entitled to receive a portion of
the Base Salary and Bonus for such pay period prorated to the date on which the
Executive's employment is terminated.
4.2. Termination As Result of No Cause, Control or Good Reason
Termination Event. If the Executive's employment hereunder is terminated as a
result of the occurrence of a No Cause Termination Event, a Control Termination
Event or a Good Reason Termination Event, the Company shall pay to the
Executive (a) an amount equal to 100% of the aggregate Base Salary then in
effect that would have been payable to the Executive pursuant to this Agreement
if the Executive had remained employed by the Company for the twenty-four
consecutive months immediately following the termination of his employment
hereunder, (b) if such termination occurs prior to the end of any pay period, a
portion of the Base Salary and Bonus for such pay period prorated to the date
on which the Executive's employment is terminated, (c) any vested compensation
previously deferred by the Executive and not yet paid, and (d) all reasonable
business-related expenses incurred by the Executive prior to such termination
for which the Executive would have been reimbursed pursuant to Section 2.5
hereof (the amounts referred to in clauses (a), (b), (c) and (d) being the
"Severance Payments"). The Severance Payments shall be paid by the Company to
the Executive within 10 days after such termination. In addition to the
Severance Payments, the Company shall continue to provide to the Executive all
benefits set forth in Section 5.1 for twenty-four consecutive months following
such termination (the "Severance Benefits"). To the extent that all or any
portion of the Severance Payments and the Severance Benefits is subject to
excise tax under Section 280G and 4999 of the Internal Revenue Code of 1986, as
amended, the Company shall pay to the Executive any amounts necessary to
reimburse the Executive in full for any such excise tax payable by the
Executive in respect of the Severance Payments and the Severance Benefits and
for any income taxes payable by the Executive in respect of such payments by
the Company to the Executive (the "Tax Reimbursement"). Upon the written
request of the Executive at any time within one year after the date of the
termination of the Executive's employment hereunder as a result of the
occurrence of a No Cause Termination Event, a Control Termination Event or a
Good Reason Termination Event, the Company shall reimburse any reasonable
expenses incurred by the Executive in relocating the Executive and his
dependents to any location within the 48 contiguous United States that is more
than 40 miles from the Executive's residence on the date of such termination to
the extent any such expenses are not reimbursed by a new employer of the
Executive (the "Relocation Expenses"), and the Company shall also pay to the <PAGE>
<PAGE> 36
Executive such additional amounts necessary to reimburse the Executive in full
for any taxes payable with respect to Relocation Expenses paid by the Company
to the Executive (the "Relocation Tax Expense"). Other than the Severance
Payments, the Severance Benefits, the Tax Reimbursement, the Relocation
Expenses and the Relocation Tax Expense, the Company shall have no further
obligation to pay the Executive the Base Salary, Bonus or any other benefits
pursuant to this Agreement.
4.3. Termination As Result of Disability Termination Event. If the
Executive's employment hereunder is terminated as a result of a Disability
Termination Event, as of the date of the termination of the Executive's
employment hereunder, the Company shall have no further obligation to pay the
Executive any Base Salary, Bonus or any other benefits pursuant to this
Agreement; provided, however, that the Company shall pay to the Executive any
vested compensation previously deferred by the Executive and not paid as of the
date of such termination. If such termination occurs prior to the end of any
pay period, the Executive shall be entitled to receive a portion of the Base
Salary and Bonus for such pay period prorated to the date on which the
Executive's employment is terminated. Notwithstanding the foregoing, if this
Agreement is terminated as a result of the (a) death of the Executive, the
Executive's family shall be entitled to receive benefits at least equal to
those provided by the Company to surviving families of senior executives of the
Company under such plans, programs and policies relating to family death
benefits, if any, in effect on the date of the Executive's death, or (b) total
disability of the Executive as described in Section 3.1(a), in addition to the
benefits contemplated by Section 5.2, the Executive shall be entitled to
receive disability and other benefits at least equal to those provided by the
Company to disabled employees and their families in accordance with such plans,
programs and policies relating to disability, if any, in effect on the date of
the Executive's total disability.
Section 5. Additional Employment Benefits
5.1. Benefits. The Company shall provide the Executive with
such medical, dental, life and disability insurance as the Board shall
authorize from time to time for the benefit of senior executives of the Company
generally. In addition, the Executive shall have the right to participate in
all incentive, savings and retirement plans available to senior executives of
the Company generally and to receive such additional fringe benefits as the
Board shall authorize from time to time for the benefit of senior executives of
the Company generally.
5.2. Vacation. The Executive shall receive at least four (4)
weeks of paid vacation time each calendar year during the term of his
employment hereunder, which vacation shall be prorated if the Executive's
employment hereunder is terminated prior to December 31 of any year.
Section 6. Covenants
6.1. Confidential Information. Other than in connection with
performing his duties in good faith hereunder, the Executive hereby agrees that
he will hold in confidence any confidential information relating to the
<PAGE>
<PAGE> 37
business or operations of the Company ("Confidential Information") and that he
will not use or disclose the same to any third party for any reason (unless
disclosure is compelled by judicial or administrative process, or in the
reasonable opinion of the Executive's counsel, by other requirements of law).
Confidential Information shall not include information (a) known by the
Executive prior to his employment by the Company in any capacity, (b)
ascertained by the Executive other than in his capacity as the Chief Financial
Officer of the Company, (c) ascertainable or obtained from public or published
sources, or (d) that is or becomes known to the public (other than through a
breach of this Agreement).
6.2. Nonsolicitation. If the Executive's employment hereunder
is terminated as a result of the occurrence of a Voluntary Termination Event or
a Good Cause Termination Event, the Executive agrees that he shall not, during
the two year period after the date of such termination, without the Company's
prior written consent, directly or indirectly, knowingly solicit or encourage
to leave the employment of the Company, any salaried employee of the Company or
hire any salaried employee (other than the personal secretary of the Executive
or a relative of the Executive) who has left the employment of the Company
within one year of such termination of the Executive's employment; provided,
however, that the Executive shall not be prohibited from hiring any employee of
the Company whose employment has been terminated by the Company without good
cause.
Section 7. Miscellaneous
7.1. Indemnification. The Company shall indemnify and hold the
Executive harmless to the fullest extent permitted under applicable law as it
presently exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Company to
provide broader indemnification rights than said law permitted prior to such
amendment) against all expense, liability and loss (including attorneys' fees,
judgements, fines, ERISA excise taxes or penalties and amounts to be paid in
settlement) incurred in connection with any asserted or threatened action, suit
or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he was an officer, director or employee of the Company
or its former parent, Braelan Corp. ("Braelan") or was serving at the request
of the Company or Braelan as an officer, director, employee, fiduciary or agent
of another corporation or other entity. In the event that the Executive shall
receive written notice of any claim or proceeding against him that, if
successful, might result in a claim under this Section 7.1, the Executive shall
give written notice to the Company of such claim or proceeding and shall permit
the Company to participate in the defense of such claim or proceeding by
counsel of the Company's own choosing and at the expense of the Company. In
addition, upon the written request of the Company, the Company may assume at
its own expense the defense of any such claim or proceeding, provided that the
Executive may participate at his expense in any such defense to the extent he
may deem necessary or appropriate to protect his interests. Upon the final
determination of any such claim or proceeding, the defense of which has been
assumed by the Company, the Company shall fully discharge at its own expense
all liability of the Executive and shall be entitled at its own expense, but
without any liability of the Executive therefor, to compromise or settle any
such claim or proceeding upon terms reasonably satisfactory to both the Company
and the Executive.
<PAGE>
<PAGE> 38
7.2. No Disclosure. Each party hereto agrees that if the
Executive's employment by the Company is terminated for any reason whatsoever,
each party hereto will keep confidential and not make any public disclosures
concerning the circumstances relating to such termination.
7.3. No Litigation. The Executive represents and warrants to
the Company that there are no litigation proceedings pending or, to his
knowledge, threatened against the Executive in his individual capacity or in
any capacity that might give rise to a claim for indemnification under Section
7.1 hereof.
7.4. Binding Effect. This Agreement shall inure to the benefit
of and shall be binding upon the Executive and his executor, administrator,
heirs, personal representative and assigns, and the Company and its respective
successors and assigns; provided, however, that the Executive shall not be
entitled to assign or delegate any of his rights or obligations hereunder
without the prior written consent of the Company.
7.5. No Mitigation. In no event shall the Executive be
obligated to seek employment in mitigation of amounts payable to the Executive
pursuant to Section 4 hereof, and, other than as specifically provided in
Section 4.2, the employment of the Executive after the termination of the
Executive's employment by the Company shall not affect in any way or offset any
amounts payable to the Executive pursuant to this Agreement.
7.6. Fees. The Company agrees to pay to the Executive to the
fullest extent permitted by law all fees and expenses (including reasonable
attorneys' fees) incurred by the Executive in seeking to enforce any provision
of this Agreement, provided that the Executive shall refund such fees and
expense payments if it is finally judicially determined that the Executive is
not entitled to any relief.
7.7. Governing Law. This Agreement shall be deemed to be made
in, and in all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of Georgia, without reference to
principles of conflict of laws. No provision of this Agreement or any related
document shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority by reason
of such party having or being deemed to have structured or drafted such
provision.
7.8. Survival of Certain Agreements. The agreements and
covenants set forth in Section 6.1 hereof shall survive the termination of the
Executive's employment under this Agreement for any reason.
7.9. Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
7.10. Notices. Unless otherwise agreed to in writing by the parties
hereto, all communications provided for hereunder shall be in writing and shall
be deemed to be given when delivered in person or five (5) business days after
being sent by first class mail, certified, return receipt requested, and
addressed as follows:
<PAGE>
<PAGE> 39
(a) If to the Executive, addressed to:
Mr. Barry F. Shea
444 Hawthorne Drive
Danville, Virginia 24541
(b) If to the Company, addressed to:
Dan River Inc.
2291 Memorial Drive
Danville, Virginia 24541
Attention: Board of Directors
c/o Corporate Secretary
or to such other person or address as shall be furnished in writing by any
party to the other prior to the giving of the applicable notice or
communication.
7.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
7.12. Entire Agreement. This Agreement is intended by the parties
hereto to be the final expression of their agreement with respect to the
subject matter hereof and is the complete and exclusive statement of the terms
thereof, notwithstanding any representations, statements or agreements to the
contrary heretofore made. This Agreement may be modified only by a written
instrument signed by each of the parties hereto.
7.13. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its Affiliates for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have under
any other agreements with the Company or any of its Affiliates. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan or program of the Company or any of its Affiliates at or
subsequent to the date on which his employment hereunder is terminated shall be
payable in accordance with such plan or program.
7.14. Severability. In the event that any provision of this
Agreement shall be deemed invalid or unenforceable, the remaining provisions of
this Agreement shall remain in full force and effect.
7.15. Prior Agreement. This Agreement succeeds an Employment
Agreement dated September 3, 1991, which expires on September 2, 1996 and
remains in full force and effect through and including such date, with this
Agreement to take effect on September 3, 1996 in renewal and amendment of such
prior Agreement.
<PAGE>
<PAGE> 40
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE COMPANY
DAN RIVER INC.
By:---------------------------
Joseph L. Lanier, Jr.
Chairman and CEO
[CORPORATE SEAL]
ATTEST:
By:---------------------------
Title:------------------------
THE EXECUTIVE
-----------------------------
Barry F. Shea
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET OF DAN RIVER INC. AS OF SEPTEMBER 28, 1996
AND THE RELATED CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS
ENDED SEPTEMBER 28, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> SEP-28-1996
<CASH> 1,941
<SECURITIES> 0
<RECEIVABLES> 52,060
<ALLOWANCES> 0
<INVENTORY> 87,606
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<PP&E> 265,268
<DEPRECIATION> 94,673
<TOTAL-ASSETS> 327,028
<CURRENT-LIABILITIES> 52,965
<BONDS> 167,146
7,338
0
<COMMON> 8
<OTHER-SE> 75,569
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<SALES> 272,031
<TOTAL-REVENUES> 272,031
<CGS> 220,975
<TOTAL-COSTS> 220,975
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 13,959
<INCOME-PRETAX> 3,660
<INCOME-TAX> 1,447
<INCOME-CONTINUING> 2,213
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,213
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
