EXHIBIT 10.1
SEPARATION AGREEMENT AND WAIVER OF CLAIMS
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THIS AGREEMENT is made and entered into by and between KENNETH M. LUDWIG
(hereinafter referred to as "Employee") and CULP, INC., a North Carolina
corporation (hereinafter referred to as the "Company").
THEREFORE, in consideration of the mutual agreements and promises set
forth within this Agreement, the receipt and sufficiency of which are hereby
acknowledged, Employee and the Company agree as follows:
1. Consideration. As valuable and sufficient consideration for each and
all of the Employee's obligations and promises set forth below, the Company will
provide the following:
(a) The Company will continue Employee's current salary through June 30,
2009. These payments will be made at the Company's regular monthly paydays, and
are subject to withholding for standard statutory deductions and for any benefit
plans in which Employee continues to participate during the severance period.
Employee's auto allowance will end as of December 31, 2007.
(b) In addition to the aforementioned severance pay, Employee shall be
entitled to continue health care coverage under COBRA. Employee may continue to
pay the regular employee rate for such coverage until the conclusion of the pay
continuation covered in paragraph (a) above. Following such period, Employee
shall be responsible for the full premium under the Company's COBRA plan.
(c) Vested stock options will continue to be exercisable until September
28, 2009, subject to the terms of each option and the Company's policy on stock
trading and "blackout periods".
(d) Under the Deferred Compensation Plan, Employee's elective
contributions for plan year 2007 are binding and will continue to be deducted
from Employee's pay. Employee will have no option to have elective contributions
deducted for plan year 2008. Employee will be entitled to a distribution of
Employee's account balance after June 30, 2008.
(e) Employee will be entitled to receive a bonus under the Company's
Management Incentive Plan, after the end of the Company's current fiscal year
and in accordance with the provisions of the Management Incentive Plan as
approved by the Company's board of directors on April 26, 2007, equal to 66.67%
of the bonus amount that Employee would otherwise have been entitled to receive
under such Plan if he had remained employed by the Company through the end of
the current fiscal year.
(f) Outplacement assistance for 18 months from the date of termination of
employment will be provided through an outplacement services firm mutually
agreeable to Company and Employee.
(g) Employee's termination shall be treated as a resignation.
2. Prior Legal Obligations. The parties agree that the Company has no
prior legal obligation to make the payments or provide the benefits agreed to in
paragraph 1.
3. Waiver of Claims. In exchange for the Company's agreement to make the
payments and provide the benefits set forth in paragraph 1, Employee agrees not
to make any claims or demands or to commence any type of legal action (including
administrative charges or lawsuits) against the Company (as well as its Board
members, officers, officials, employees and agents) or any related companies,
subsidiaries, successors, or assigns on matters arising from Employee's
employment with or termination from the Company. This includes, but is not
limited to a release of any and all rights, claims, or causes of action arising
under any state or federal constitution, statute, law, rule, regulation, or
common-law principle of tort, contract, or equity. This waiver of claims
specifically includes but is not limited to any action under the Age
Discrimination in Employment Act of 1967, 29 U.S.C sec. 621, et seq.; Title VII
of the Civil Rights Act of 1964, as amended, 42 U.S.C. sec. 2000e, et seq.; the
Americans with Disabilities Act of 1990, 42 U.S.C. sec. 12101, et seq., the
Family and Medical Leave Act; the Equal Pay Act; the Fair Labor Standards Act;
the Sarbanes-Oxley Act, all as amended, or any other federal, state, county or
municipal statute or ordinance relating to any condition of employment or
employment discrimination.
Employee also releases the Company and each "employee benefit plan" (as
that term is defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended) sponsored, contributed to or maintained by the Company,
and each insurer, administrator, trustee and fiduciary of any such employee
benefit plan, from any and all claims, actions, demands and suits, other than
claims for benefits in the ordinary course.
By entering into this Agreement, Employee does not waive any rights or
claims that Employee might have which arise as a result of any conduct that
occurs after the date this Agreement is signed by the parties.
4. Full Cooperation. Employee agrees that no other person (including but
not limited to Employee's attorney, heirs, executors, administrators,
successors, and assigns) may assert any claim that Employee has or might have
against the Company and further agrees that Employee will fully cooperate with
the Company in seeking dismissal of any such claim that might be raised on
Employee's behalf. Additionally, Employee acknowledges that Employee may have
knowledge of facts relevant to a legal action or claim against the Company, and
that it may be necessary to provide information as a witness regarding that
action or claim. Employee agrees to cooperate fully in providing information in
Employee's knowledge at such times and at such places as the Company may
reasonably request.
5. Termination of Employment. Employee and the Company hereby mutually
agree that their employment relationship shall terminate effective as of
December 31, 2007, and they further agree that the relationship created by this
Agreement is purely contractual and that no employment relationship is intended,
or should be inferred, from the performance of the Company's obligations under
this Agreement.
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6. Return of Company Property. All records, files, lists, including
computer-generated lists, drawings, notes, notebooks, letters, blueprints,
manuals, sketches, specifications, formulas, financial documents, sales and
business plans, customer lists, lists of customer contacts, pricing information,
computers, software, cellular phones, credit cards, keys, equipment and similar
items relating to the Company's business, together with any other property of
the Company or property which the Employee received in the course of employment
with the Company, shall be returned to the Company immediately. Employee further
represents that Employee will not copy or cause to be copied, print out or cause
to be printed out any software, documents or other materials originating with or
belonging to the Company.
7. Performance. Employee understands and agrees that the Company's
obligation to perform under this Agreement is conditioned upon Employee's
covenants and promises to the Company as set forth herein. In the event Employee
breaches any such covenants and promises, or causes any such covenants or
promises to be breached, the Company's obligations to perform under this
Agreement shall automatically terminate, and the Company shall have no further
liability or obligation to Employee. Alternatively, the Company may seek
injunctive relief to enforce the provisions of this Agreement.
8. Non-admission of Liability. It is understood that the Company, by
entering into this Agreement, in no way admits any liability to any party or
that it has in any way violated any state or federal law or any other law or
regulation.
9. Confidentiality and Non-disparagement. Employee agrees to maintain the
confidentiality of this Agreement by not disclosing its contents, including the
amount of the monetary payments, except to Employee's legal or tax counsel; in a
privileged communication; or as otherwise required by law. Employee agrees not
to make any statements to the Company's employees, customers or suppliers or to
any public or media source, whether written or oral, regarding Employee's
departure from the Company's employment except as may be approved by the Company
in advance. Employee further agrees not to make any statement (including to any
media source, or to the Company's suppliers, customers or employees) or take any
action that would disrupt, impair, embarrass, harm, or adversely affect the
Company, its affiliates or any of their employees, officers, directors, or
customers, or place the Company, its affiliates or such individuals in any
negative light. Employee hereby recognizes that any breach of this paragraph
would cause the Company irreparable injury and damage, the amount of which would
be difficult to determine. In the event the Company establishes a breach of this
paragraph, Employee agrees to forfeit the payment of any unpaid or unaccrued
benefits under the Agreement. Employee also agrees to pay any legal fees and
associated costs incurred by the Company in enforcing this Agreement and/or in
seeking any relief or damages.
10. Entire Agreement; Modification. Employee affirms that the only
consideration for the signing of this Agreement is set forth in paragraph 1, and
that no other promises or assurances of any kind have been made to the Employee
by the Company, its attorneys, or any other person as an inducement for Employee
to sign this Agreement. This Agreement can be changed only by written amendment
signed by both parties.
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11. Complete Defense. The parties agree that this Agreement may be treated
as a complete defense to any legal, equitable, or administrative action that may
be brought, instituted, or taken by Employee, or on Employee's behalf, against
the Company and shall forever be a complete bar to the commencement or
prosecution of any claim, demand, lawsuit, charge, or other legal proceeding of
any kind against the Company, any related companies and subsidiaries, and the
directors, officers, employees and agents of them, including any successors and
assigns, relating the Employee's employment with the Company and/or the
termination of Employee's employment with the Company.
12. Successors, Assigns, and Representatives. This Agreement shall inure
to and be binding upon the parties hereto, their respective heirs, legal
representatives, successors, and assigns.
13. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the state of North Carolina and any applicable
federal laws.
14. Partial Invalidity. The parties agree that the provisions of this
Agreement shall be deemed severable and that the invalidity or unenforceability
of any provision shall not affect the validity or enforceability of the other
portions or provisions. Such provisions shall be appropriately limited and given
effect to the extent that they may be enforceable.
15. Revocation. Employee understands that this Agreement may be revoked by
Employee within seven (7) days after the signing of the Agreement. To revoke the
Agreement, Employee understands that Employee must notify the Company in writing
that Employee no longer wishes to be bound by this Agreement and desires to
revoke the Agreement immediately. This Agreement shall not become effective and
enforceable until seven (7) days after it has been signed by Employee. All
correspondence to the Company regarding this Agreement and any revocation of
this Agreement should be addressed to Franklin N. Saxon, Chief Executive
Officer, Culp, Inc., P.O. Box 2686, High Point, N.C. 27261-2686.
16. Employee affirms that Employee has carefully read this entire
Separation Agreement and Waiver of Claims. Employee attests that Employee
possesses sufficient education and/or experience to fully understand the extent
and impact of its provisions.
Employee attests that Employee has been afforded the opportunity to
consider this Agreement for a period of twenty-one (21) days. Employee further
attests that Employee has been advised by the Company to discuss this Agreement
with an attorney of Employee's choice.
Employee affirms that Employee is fully competent to execute this
Separation Agreement and Waiver of Claims and that Employee does so voluntarily
and without any coercion, undue influence, threat, or intimidation of any kind
or type.
THE UNDERSIGNED HEREBY STATE THAT THEY HAVE CAREFULLY READ THE FOREGOING
SEPARATION AGREEMENT AND WAIVER OF CLAIMS AND KNOW THE CONTENTS THEREOF AND SIGN
THE SAME OF THEIR OWN FREE ACT.
(Signatures on the Following Page)
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EMPLOYEE:
/s/ Kenneth M. Ludwig December 11, 2007
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Kenneth M. Ludwig Date
FOR THE COMPANY:
/s/ Franklin N. Saxon December 11, 2007
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Franklin N. Saxon Date
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